Taking Aim at Corporate Bribery  Illustration by The New York Times November 25, 2007 Payload: Taking Aim at Corporate Bribery LATE last month, five jumbo jets from Riyadh touched down at Heathrow Airport in London. They brought with them 13 members of the Saudi royal family, including King Abdullah and his retainers — and controversy. Over the last four years, the British government has been dogged by criticism of its relationship with Saudi Arabia, which is Britain's biggest trading partner in the Middle East. The state visit, the first by a Saudi monarch in 20 years, was no exception, with much of the storm centering on controversial financial ties linking the British military contracting giant, BAE Systems, to Downing Street and the desert kingdom. The leader of one major British political party boycotted King Abdullah's visit while protesters turned out for his ceremonial carriage ride to Buckingham Palace. Much of the debate turns on the fact that BAE made billions of dollars in clandestine and questionable payments to Saudi royals over the last 20 years as part of an $80 billion contract to supply the kingdom with advanced fighter jets and other military hardware. While the investigation of BAE's business practices has followed a circuitous path in Britain, it has recently gained independent momentum in the United States, where the Justice Department is now investigating the company. BAE generates nearly half its revenue in the United States, and it recently acquired a major supplier of armored Humvees used by American forces in Iraq. American officials who were granted anonymity because they were not authorized to speak publicly about the matter said the Justice Department is examining whether BAE violated domestic laws banning international bribery and money laundering. Accounts in Switzerland, the Caribbean and elsewhere are involved, and, like Britain, the United States has a strategic relationship with the Saudis that the investigation threatens. Although the cast of players in the BAE story is unusually broad — it includes Saudi royals like Prince Bandar bin Sultan, the kingdom's former ambassador to the United States, as well as Tony Blair, the former British prime minister — the investigation is but one in a bounty of cases that the Justice Department recently started under a once-obscure law called the Foreign Corrupt Practices Act (or F.C.P.A.). BAE and the Saudis have openly acknowledged the payments at the center of the investigation, deny any wrongdoing and say that the payments were known to the British and Saudi governments. "We are aware of the U.S. D.O.J. investigation and we are fully cooperating," a BAE spokeswoman said. "As it is an ongoing investigation, we cannot comment any further." While the BAE investigation apparently ran aground in Britain, it has gained enough interest in the United States to cause some of those in the middle of it to secure high-profile legal advisers. Prince Bandar, a confidant of the Bush family, recently retained the former Federal Bureau of Investigation director Louis J. Freeh, as well as one of the fathers of the F.C.P.A., the retired federal judge Stanley Sporkin, to represent him. "There have been no charges filed," Mr. Freeh said in an interview. "The prince denies any impropriety and violating any statutes in the United Kingdom or the United States." The revelation that British investigators had discovered that BAE deposited $2 billion in payments into Prince Bandar's Washington bank accounts led the Justice Department to enter what analysts describe as the highest-profile F.C.P.A. case to date. Passed by Congress three decades ago in the wake of Watergate, it is only in the last five years that the F.C.P.A. has become a powerful tool for prosecuting domestic and overseas companies suspected of bribing foreign officials to secure business. Justice Department officials estimate that there are about 60 such cases under investigation or prosecution in the United States, with a new, five-member F.B.I. team dedicated to examining possible violations of the act. According to the Organization for Economic Cooperation and Development, a group based in Paris that represents 30 industrialized countries, there are more than 150 prosecutions or investigations worldwide involving possible bribery of government officials for commercial gain. While law enforcement officials and governments in disparate jurisdictions once hesitated to work together to combat corporate fraud, graft has come to be seen as such a severe impediment to global economic growth that cooperation is becoming more frequent. Analysts say that this shift, along with the enactment of the Sarbanes-Oxley law tightening corporate oversight — and a greater willingness among companies themselves to tackle corruption — has also begun to change how many corporations operate in poorer, developing countries where graft has been most detrimental. Lawyers, prosecutors and corporate executives in the United States and abroad say they are closely watching the BAE investigation because it offers a test of how aggressively anti-corruption initiatives will be pursued globally, particularly in countries like Britain and Japan that have resisted enforcing such efforts. "The BAE case is a watershed moment," says Mark Pieth, who oversees anti-bribery efforts for the O.E.C.D. "Large multinationals in many countries have come to us and told us that." FOR BAE, the fact that billions in payments to Prince Bandar and his relatives might be considered bribes means more than just the potential imposition of heavy fines. It may also mean, analysts say, that BAE executives potentially could go to prison and the company might find itself barred from doing business with the United States government. The taint of bribery scandals in emerging markets could also have bruising financial implications for BAE. In regions of the world where bribe-taking has long been baked into business transactions — East Asia, the former Soviet Union, Africa and Latin America, for example — legal investigations could make the company vulnerable as those areas become more desirable for military contractors looking for new clients. For companies that have not adapted to the new legal landscape, the consequences are becoming more serious. This year, Baker Hughes, the oil services company, paid a record $44 million fine after admitting that it had bribed officials in Kazakhstan, Angola, Russia, Nigeria and elsewhere. Halliburton, an oil services giant that was once headed by Vice President Dick Cheney, has disclosed that it is facing an F.C.P.A. investigation into its activities in Nigeria before, during and after Mr. Cheney's tenure at the company. A spokeswoman for the vice president declined to comment. Halliburton did not respond to an interview request. Aon, a major insurance broker, recently disclosed in corporate filings that it is the subject of an F.C.P.A. inquiry but declined to provide further details. Last month, the Willbros Group, an oil services company, said it would pay $32 million to settle an F.C.P.A. charge related to bribes paid in Nigeria and elsewhere — including $1 million handed over in a suitcase. A former Willbros executive who pleaded guilty to federal charges in the case faces a prison sentence of as much as five years. While executives involved in paying bribes can be jailed, foreign officials cannot be charged under the law. "The F.C.P.A. has now surpassed Sarbanes-Oxley for being at the nerve endings of corporate general counsels and executives," says Daniel E. Karson, executive managing director at Kroll Associates, a private investigative firm that conducts due diligence and background investigations for corporations and other clients. Last week, Alice Fisher, assistant attorney general and head of the Justice Department's criminal division, traveled to Rome for an anticorruption conference marking the 10th anniversary of the O.E.C.D.'s adoption of anti-bribery regulations, which parallel the Foreign Corrupt Practices Act. Ms. Fisher, who declined to comment on the BAE case, said her F.C.P.A. caseload this year was running at twice last year's pace, and she predicted that the upward trend would continue in 2008. She said she planned to press her overseas law enforcement counterparts in Rome for continued collaboration to combat corporate bribery. "I don't take many foreign trips, but this is important to the overall program," she said. "There are a lot of countries that can do more." ONE of those countries, ironically, is Britain, usually among the closest of allies of the United States. Historically, according to documents in British government archives, Britain, long dependent on foreign trade, has resisted anticorruption efforts because it believes that they undermine the country's business interests abroad. After a series of articles in 2003 and 2004 in The Guardian, the British newspaper, about possible bribes and other improprieties involving BAE, the Serious Fraud Office of Britain started an official investigation. But after the Saudi government strongly objected to the investigation, Mr. Blair, then the prime minister, ordered it halted late last year on security grounds. "The result would have been devastating for our relationship with an important country with whom we cooperate closely on terrorism, on security, on the Middle East peace process," Mr. Blair said at a news conference. "That is leaving aside the thousands of jobs which would have been lost, which is not the consideration in this case, but I just point it out." The British High Court recently ordered a full judicial review of Mr. Blair's decision not to pursue the BAE investigation. Meanwhile, the Justice Department's BAE investigation has benefited from cooperation by law enforcement agencies elsewhere in Europe, according to people with direct knowledge of the inquiry. A decade ago, such cooperation would have been impossible because many European governments considered corporate bribery tolerable — and in the case of Germany, even made it tax-deductible, as "schmear gelt," or "grease money." Since then, German authorities have become particularly aggressive in pursuing possible corruption violations, as illustrated through their continuing investigation of Siemens AG, the German industrial conglomerate. Although some American companies once actively lobbied to water down the F.C.P.A., arguing that it made it hard to compete overseas, many corporations here have now thrown their weight behind it in the belief that it can be used to prevent competitors from indulging in bribes. So anti-corruption efforts in the United States are now gathering legal steam. "There has been a dramatic increase in the resources dedicated to enforcing the law by the Justice Department and the F.B.I., and even more important, a strong public commitment to compliance as well as enforcement," says Peter B. Clark, who oversaw F.C.P.A. prosecutions at the Justice Department from the enactment of the law in 1977 until his retirement two years ago. According to top Justice Department officials, strengthening F.C.P.A. enforcement isn't only about getting American companies to clean up their act or punishing foreign enterprises for breaking domestic laws. It is also part of an attempt to deal with the long-term impact that bribery has on emerging markets. "Corruption undercuts democracy, stifles economic growth and creates an uneven playing field for U.S. companies overseas," Ms. Fisher says. "We are facing transnational crime all over the place." Any company with an American connection — a listing on the New York Stock Exchange, for example, or the use of an American bank account to transfer suspect payments — opens the door for prosecution under the F.C.P.A. For example, the Justice Department began investigating BAE's payments to the Saudi royals, and Prince Bandar in particular, this year, after it learned that BAE deposited billions of dollars in such payments in American banks. Among those institutions was Riggs Bank. Riggs, a subsidiary of the Riggs National Corporation, paid $41 million in federal penalties in 2004 and 2005 to settle a high-profile federal investigation of money-laundering violations before it was taken over by the PNC Financial Services Group. A PNC spokesman declined to comment directly on the BAE matter, but said that any possible transgressions occurred before the takeover and that Riggs was required to divest units catering to diplomats and foreign clients before the buyout. ON a rainy morning this August, an unusual visitor arrived at the Justice Department's headquarters in Washington. Although a British citizen, he had, for security reasons, taken a circuitous route via Paris to meet with senior Justice Department prosecutors, F.B.I. agents and members of the criminal division of the Internal Revenue Service. During two days of questioning in a windowless conference room, that visitor, Peter Gardiner, detailed how he had helped BAE disburse millions to the Saudi royal family to pay for everything from luxury travel to female escorts, according to people with knowledge of the meeting who insisted on anonymity because they were not authorized to publicly discuss the case. Much of the money Mr. Gardiner said he had disbursed went to cover expenses racked up by Prince Turki bin Nasser, head of the Saudi air force and a major BAE customer. Other funds were earmarked for the honeymoon of Prince Bandar's daughter. Mr. Gardiner owned a travel agency that catered to the needs of BAE and its Saudi customers, and his information about their dealings has been known to British authorities for some time. It was also a primary basis for some of The Guardian's articles about the matter. But the meetings, on Aug. 20 and 21, signaled that the Justice Department had moved beyond asking London for assistance with the investigation to interviewing witnesses and collecting documents directly, based on the belief that BAE's payments may have violated United States laws banning international bribery and money laundering. When contacted for an interview about the meetings, Mr. Gardiner said that the Justice Department had asked him not to comment. In September, about 10 months after Mr. Blair quashed the BAE investigation in Britain, the company won a new contract to supply Typhoon jets to Saudi Arabia; the deal could amount to $60 billion over the next 25 years, according to trade publications. By the time Mr. Blair shut down the British investigation late last year, however, the Justice Department was already aware of BAE's practices. As far back as July 2002, representatives from the State, Justice and Defense departments, as well as the C.I.A., sat down in Washington with senior British officials from the Ministry of Defense to complain about suspected bribery by BAE in Central Europe, the Persian Gulf and South Africa. Sir Kevin Tebbit, then Britain's permanent under secretary of the Ministry of Defense, rejected the suspicions as baseless. American officials who participated in the meeting later nicknamed him Sir Topham Hatt after a character in the Thomas the Tank Engine children's series because of what they said was "his almost haughty disdain for the allegations of bribery involving BAE" and the manner in which he challenged them to detail evidence of wrongdoing. Mr. Tebbit, now retired, declined to comment and referred questions about his interactions with American officials to his former employers in the Ministry of Defense. The ministry declined to comment. The meeting with Mr. Tebbit came after the United States Defense Department, along with the military contractors Lockheed and Boeing, formally withdrew from a competition to sell fighter aircraft to the Czech Republic in 2001. A letter written by Lt. Gen. Tome H. Walters Jr., then head of overseas sales for the Pentagon, to the Czech foreign minister said that there was a "lack of transparency" in the negotiations. The letter also cited a conclusion by the United States government that competition for the contract was not above board. The contract was subsequently awarded to BAE and its Swedish partner, Saab. In an interview, General Walters, now retired, said that the problems in the Czech Republic followed similar problems trying to sell American jets to the Hungarian government. BAE secured the Hungarian contract as well. American officials say they believe that the Hungarian and Czech governments were influenced by payments. They cite a C.I.A. briefing during which they were told that BAE paid millions of dollars to the major political parties in Hungary to win the contracts there. BAE said it is unaware of any investigations of the company in Hungary. "BAE Systems has very strong policies and processes in place which it is clearly committed to communicating to its employees and advisers," a spokesman said. "Any action which is unlawful, dishonest, harmful to others or otherwise against our policies, is unacceptable." Although Mr. Gardiner's cooperation signaled a possible escalation in the American investigation, those with knowledge of the inquiry say British authorities are resisting requests from Washington for help. Representatives of the Home Office of Britain, which handles these requests, have told Parliament that they have yet to decide whether to cooperate. Despite tensions between the United States and Britain over the matter, Swiss law enforcement authorities have decided to cooperate with the Justice Department investigation, according to a person with direct knowledge of the matter. The Swiss are likely to soon begin sharing records of financial transactions and bank accounts with American prosecutors. That will be crucial to charting what law enforcement officials describe as a flow of dollars from BAE to a network of company agents and public officials in Saudi Arabia, South Africa, Hungary and the Czech Republic. So far, the American investigation hasn't harmed BAE's booming business with the Pentagon. This summer, Senator John Kerry, Democrat of Massachusetts, citing the inquiry, objected to BAE's purchase of Armor Holdings, which makes armored Humvees and other military equipment, in letters to the Justice Department and the Treasury Department. But the Armor Holdings sale was completed in July for $4.5 billion. DESPITE the new fondness for the F.C.P.A. in domestic law enforcement circles, the cases are notoriously complex to prosecute and are made even more so by the fact that many overseas jurisdictions are involved. Even in an era of increasing cooperation, internal politics in other countries can become roadblocks. "The rhetoric has changed," says Benjamin W. Heineman Jr., who was General Electric's chief legal officer from 1987 to 2005. "Everybody says the right thing now, but what are they doing?" Mr. Heineman praises the Justice Department's efforts but says he is frustrated that the O.E.C.D. isn't doing even more, especially in the BAE case. "They don't powerfully name and shame the laggards," he says. The threat of an indictment under the F.C.P.A., more than financial penalties, is what worries most companies that may come under scrutiny as part of the Justice Department's crackdown on bribery. "No publicly traded company wants to be branded with the stigma of an indictment," says David Zornow, who directs the white-collar criminal practice in New York for the law firm of Skadden, Arps, Slate, Meagher & Flom. "It's potentially ruinous." Multinational companies competing in these countries are turning to law and accounting firms as well corporate investigators like Kroll to help them navigate through the F.C.P.A.'s regulations and to vet local partners in countries like China and Nigeria. PricewaterhouseCoopers has doubled the size of its F.C.P.A. practice over the past five years. Deloitte & Touche has mobilized in a similar way. It says that when it scrutinizes companies for possible bribery problems, it looks for such red flags as tuition payments for the children of government administrators, property purchases or rentals from foreign officials or their relatives, and payments in exchange for information about competitor's activities. Lawyers with experience in F.C.P.A. cases say that gathering facts in such matters is never easy. Kevin T. Abikoff, a lawyer at Hughes, Hubbard & Reed who has represented several companies accused of running afoul of the F.C.P.A. in Nigeria, says that large companies typically cut employees loose once they are charged with a crime. "It's a rare person who says, 'It was me; it's my fault,'" he says. "There's finger-pointing up, down and sideways." During the O.E.C.D. anti-corruption meeting in Rome last week, which celebrated the 10th anniversary of the organization's treaty outlawing international bribery, its head, Angel Gurria, said that national security concerns — the reason Mr. Blair gave for terminating the BAE investigation in Britain — "should not be used" as a reason for quashing bribery investigations. He also voiced concern that anti-corruption efforts were in danger of weakening. "Now I do not want to spoil the birthday party, but I do have to say that what we have achieved is still not good enough," he added. "There will be big risks that countries will go back to doing 'business as usual,' including corruption. The only way to prevent this is to ensure that everyone plays by the same rules." Marlena Telvick contributed reporting. |
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 | Schumacher to test again for Ferrari Just a week after he made a triumphant return to Formula One testing for Ferrari at Barcelona's Circuit de Catalunya, it has been confirmed that Michael Schumacher is to test again for the Italian team.
Schumacher, who retired at the end of the 2006 season, is expected to be in action at the next multi-team test which will take place at the Spanish circuit of Jerez next month.
It is understood the seven-time world champion will spend two days behind the wheel of the F2007 as he continues to assist the squad with their 2008 preparations.
At last week's test in Barcelona the 38 year-old clocked the fastest time on both days he was in action. Since his retirement, he has remained part of the Ferrari family and attended several Grands Prix this season in his role as 'special advisor' to the Italian team |
© 1999-2007 Formula One Administration Ltd |
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| Today’s Papers Slow progressBy Ben Whitford
Posted Sunday, Nov. 25, 2007, at 5:47 A.M. E.T. There's bad news today from both Iraq and Afghanistan, where it seems that recent military successes aren't translating into political progress. The New York Times leads with word that U.S. officials are lowering their expectations in Iraq, dropping plans for an oil-sharing deal and regional elections in favor of less ambitious goals. The Washington Post leads on news that despite a string of combat successes by US and NATO troops in Afghanistan, the White House's major strategic goals for 2007 have not been met. The LA Times reports on a 4,700-acre wildfire near Malibu; the blaze—the city's worst for almost 15 years—destroyed 49 homes and prompted the evacuation of thousands of residents. The Bush administration is lowering the bar in Baghdad, pushing for limited but achievable goals in a bid to convince Iraqis and Americans that the military surge is working. Among the new targets: the passage of a $48 billion Iraqi budget, a renewed U.N. mandate for America's presence in Iraq and legislation to permit former Baathists to rejoin the government. The administration's shift comes as the U.S. begins its first major drawdown of troops—and as Democrats seek to strike a balance between acknowledging military successes and blasting political failures. "The purpose of the surge was to create space for political reconciliation and that has not happened," says Hillary Clinton. "We need to stop refereeing their civil war and start getting out of it." A new National Security Council report on Afghanistan tells a similar story: While troops are winning tactical victories on the battlefield, officials fear a looming strategic failure. Despite military defeats, the Taliban has regained control of formerly secure areas and wrought havoc with suicide-bombing methods imported from Iraq. Meanwhile the economy remains stagnant, poppy cultivation is booming, and Hamid Karzai's government is widely seen as too weak to effect change. "There doesn't seem to be a lot of progress being made," admits one intelligence official. Across the border in Pakistan, two suicide car bombers attacked military targets yesterday, killing at least 15 people. The NYT reads the blasts as a response to escalating military action against insurgents in the northwest of the country; the LAT warns that failure to contain the militants could presage wider conflict along the border, and reports morale problems in the paramilitary units set up to tackle the insurgency. The Post notes that the attacks came as opposition leader Nawaz Sharif prepared to return from exile, evoking comparisons to the more deadly attack on Benazir Bhutto's supporters last month. Meanwhile, the NYT reports, President Pervez Musharraf is rapidly losing the support of Pakistan's urban middle-class citizens, who consider his emergency rule illegal and worry that it will cripple the economy. The Post eyes opposition efforts to keep press freedom alive: The hosts of banned TV talk shows have taken to the streets, interviewing politicians and pundits on sidewalk stages in front of raucous crowds. Everyone covers Australian Prime Minister John Howard's humiliating defeat in yesterday's general election; he lost his own seat as voters backed Kevin Rudd's Labor party. The Post predicts a move away from the policies that made Howard one of George Bush's closest allies: Top of Rudd's to-do list are the ratification of the Kyoto treaty and the withdrawal of Australian combat troops from Iraq. A Moscow court jailed Garry Kasparov for five days yesterday, reports the Post, after the chess-champion-turned-opposition-leader tried to lead a protest march to the offices of the federal election authorities. City officials said they had given Kasparov's Other Russia coalition permission to hold a rally, but not a march. The NYT says Kasparov called the arrest "a choreographed farce from beginning to end". Palestinian and Israeli leaders meet tomorrow in Annapolis for U.S.-sponsored peace talks. The LAT notes that Ehud Olmert and Mahmoud Abbas have developed a good working relationship, while the Post questions whether that will be enough. "There's never been less skepticism about the peaceful intentions of the leadership of the other side," one analyst tells the NYT. "But there's never been more skepticism about their capabilities to deliver." The Post gives space above the fold to a startling profile of an Israeli pediatrician who treats Palestinian children by day—and pilots an air force attack helicopter by night. "It's not a dichotomy—it's us," says one of his co-workers. "It's our life as Israelis." The White House is to modify a crackdown on illegal employment that would have forced companies to fire employees whose Social Security details didn't tally with government records. The NYT reports that the administration effectively conceded the first round of a legal battle over the rules, asking a court to delay further hearings until the new strategy is finalized. More than 200 convicted prisoners have been exonerated since 1989 thanks to DNA evidence. The NYT has interviewed more than half of them and fronts a report highlighting their struggle to resume their lives. Many received less assistance—job training, housing assistance or counseling—than would be offered to paroled prisoners, and almost 40 percent received no compensation for their time behind bars. The Post reckons there's still all to play for in the presidential primaries—especially for Mike Huckabee, who's narrowly trailing Mitt Romney in Iowa. The former Arkansas governor's surge has brought new campaign cash—and drawn his political enemies out of the woodwork. "He must be credible; otherwise they wouldn't be shooting at him," says one staffer. |
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| Pharmaceutical Companies and The Conflicts Affecting Patients Talking Back to ProzacThe Loss of Sadness: How Psychiatry Transformed ..:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Normal Sorrow into Depressive Disorderby Allan V. Horwitz and Jerome C. WakefieldOxford University Press, 287 pp., $29.95 Shyness: How Normal Behavior Became a Sicknessby Christopher LaneYale University Press, 263 pp., $27.50 Let Them Eat Prozac: The Unhealthy Relationship Between the Pharmaceutical Industry and Depressionby David HealyNew York University Press, 351 pp., $18.95 (paper) 1.During the summer of 2002, The Oprah Winfrey Show was graced by a visit from Ricky Williams, the Heisman Trophy holder and running back extraordinaire of the Miami Dolphins. Williams was there to confess that he suffered from painful and chronic shyness. Oprah and her audience were, of course, sympathetic. If Williams, who had been anything but shy on the football field, was in private a wilting violet, how many anonymous citizens would say the same if they could only overcome their inhibition long enough to do so? To expose one's shyness to what Thoreau once called the broad, flapping American ear would itself count, one might think, as disproof of its actual sway over oneself. But football fans knew that Ricky Williams was no voluble Joe Namath. Nevertheless, there he was before the cameras, evidently risking an anxiety attack for the greater good—namely, the cause of encouraging fellow sufferers from shyness to come out of the closet, seek one another's support, and muster hope that a cure for their disability might soon be found. Little of what we see on television, however, is quite what it seems. Williams had an incentive—the usual one in our republic, money—for overmastering his bashfulness on that occasion. The pharmaceutical corporation GlaxoSmithKline (GSK), through its public relations firm, Cohn & Wolfe, was paying him a still undisclosed sum, not to tout its antidepressant Paxil but simply to declare, to both Oprah and the press, "I've always been a shy person."
To understand why this was considered a worthwhile outlay, we need to know that the drug makers earn their enormous profits from a very few market-leading products for which new applications are continually sought. If those uses don't turn up through experimentation or serendipity, they can be conjured by means of "condition branding"—that is, coaching the masses to believe that one of their usual if stressful states actually partakes of a disorder requiring medication. A closely related term is more poetical: "astroturfing," or the priming of a faux-grassroots movement from which a spontaneous-looking demand for the company's miracle cure will emanate. In this instance Cohn & Wolfe, whose other clients have included Coca-Cola, Chevron Texaco, and Taco Bell, was using an athlete to help create a belief that shyness, a common trait that some societies associate with good manners and virtue, constitutes a deplorably neglected illness. Given the altruistic aura of the occasion, it would have been tasteless to have Ricky Williams display a vial of Paxil on the spot. But later (before he was suspended from the football league for ingesting quite different drugs), a GSK press release placed his name beneath this boilerplate declaration: As someone who has suffered from social anxiety disorder, I am so happy that new treatment options, like Paxil CR, are available today to help people with this condition.
There is nothing out of the ordinary in this episode, but that is just why it bears mentioning. Most of us naively regard mental disturbances, like physical ones, as timeless realities that our doctors address according to up-to-date research, employing medicines whose appropriateness and safety have been tested and approved by a benignly vigilant government. Here, however, we catch a glimpse of a different world in which convictions, perceived needs, and choices regarding health care are manufactured along with the products that will match them. The corporate giants popularly known as Big Pharma spend annually, worldwide, some $25 billion on marketing, and they employ more Washington lobbyists than there are legislators. Their power, in relation to all of the forces that might oppose their will, is so disproportionately huge that they can dictate how they are to be (lightly) regulated, shape much of the medical research agenda, spin the findings in their favor, conceal incriminating data, co-opt their potential critics, and insidiously colonize both our doctors' minds and our own. If we hear, for example, that an unprecedented epidemic of depression and anxiety has recently been sweeping the world, we tend not to ask ourselves whose interest is served by that impression. In their painstaking study The Loss of Sadness, Allan V. Horwitz and Jerome C. Wakefield cite the World Health Organization's projection that by 2020 depression will become the second leading cause of worldwide disability, behind only heart disease, and that depression is already the single leading cause of disability for people in midlife and for women of all ages. The WHO also ranks depression, in its degree of severity for individual victims, ahead of "Down syndrome, deafness, below-the-knee amputation, and angina." But Horwitz and Wakefield cogently argue that those judgments rest on a failure to distinguish properly between major depression, which is indeed devastating for its sufferers, and lesser episodes of sadness. If so, the WHO would appear to have bought Big Pharma's line of goods. This isn't to say that people who experience infrequent minor depression without long-term dysfunction aren't sick enough to deserve treatment. Of course they are. But as all three of the books under consideration here attest, the pharmaceutical companies haven't so much answered a need as turbocharged it. And because self-reporting is the only means by which nonpsychotic mental ailments come to notice, a wave of induced panic may wildly inflate the epidemiological numbers, which will then drive the funding of public health campaigns to combat the chosen affliction. This dynamic also applies to a variety of commonplace if bothersome states that the drug makers want us to regard as chemically reparable. They range from excitability and poor concentration to menstrual and menopausal effects and "female sexual dysfunction," whose signature is frustration in bed with the presumably blameless husband or lover. And the same tactic—exaggerate the problem but imply that medication will easily fix it—plays upon legitimate worries over cardiovascular disease, osteoporosis, irritable bowel syndrome, and other threats.[1] As patients on a prophylactic regimen, we are grateful for any risk reduction, however minuscule; but our gratitude leaves us disinclined to ask whether the progressively lowered thresholds for intervention were set without any commercial influence. In that sense our prescribed drugs do extra duty as political sedatives. 2.Clearly, the drug companies' publicists couldn't exercise their consciousness-shaping wiles so fruitfully without a prior disposition among the populace to strive for self-improvement through every legal means. (Neither GlaxoSmithKline nor Cohn & Wolfe invented The Oprah Winfrey Show.) For the past half-century, first with tranquilizers like Miltown and Valium and more recently with the "selective serotonin reuptake inhibitors" (SSRIs), Americans have required little prodding to believe that a medication can neutralize their social handicaps and supply them with a better personality than the one they were dealt by an inconsiderate fate. The vintage and recent advertisements reproduced in Christopher Lane's polemical Shyness, which features the manipulations that promoted social anxiety disorder to a national emergency, reflect Madison Avenue's grasp of this yearning to be born again without the nuisance of subscribing to a creed. Hopes along those lines for Valium and its cousins were soon dashed; the drugs did serve as calmants but at the cost of eventually producing mental fogginess and dependency. In the 1990s, however, the SSRIs Prozac, Zoloft, Paxil, Luvox, Celexa, and Efexor seemed very different, enhancing alertness and making many users feel as if a better self were surfacing. Peter Kramer, without ironic intent, named this phenomenon "cosmetic psychopharmacology," and his best-seller Listening to Prozac (1993) swelled a utopian wave that was racing ahead of the drug companies' most optimistic projections. Even Kramer, though, felt obliged to mention certain troubling effects of Prozac that were already coming to light in the early Nineties. These included, for some users, uncontrollable tremors, diminished sexual capacity, a growing tolerance that was leading to potentially noxious higher doses, and "suicidality," or self-destructive tendencies cropping up in the early weeks of treatment. But because Kramer's readers were weighing the risks not against a discrete medical benefit but against the prospect of becoming self-assured and gregarious at last, those cautions were generally disregarded. This point is acknowledged in Kramer's recent book Against Depression (2005)—which, however, outdoes even the World Health Organization in its awe before the galloping plague ("The most disabling illness! The costliest!"). Kramer may want to believe the worst about depression's ravages so that the SSRIs he once hailed will still be considered a net boon. Perhaps they are such; I am in no position to judge.[2] But one thing is certain: the antidepressant makers have exploited our gullibility, obfuscated known risks, and treated the victims of their recklessness with contempt. That history needs to be widely known, because the same bullying methods will surely be deployed again as soon as the next family of glamour drugs comes onstream.
Hence the importance of David Healy's stirring firsthand account of the SSRI wars, Let Them Eat Prozac. Healy is a distinguished research and practicing psychiatrist, university professor, frequent expert witness, former secretary of the British Association for Psychopharmacology, and author of three books in the field. Instead of shrinking from commercial involvement, he has consulted for, run clinical trials for, and at times even testified for most of the major drug firms. But when he pressed for answers to awkward questions about side effects, he personally felt Big Pharma's power to bring about a closing of ranks against troublemakers. That experience among others has left him well prepared to puncture any illusions about the companies' benevolence or scruples. Healy doesn't deny that SSRIs can be effective against mood disorders, and he has prescribed them to his own patients. As a psychopharmacologist, however, he saw from the outset that the drug firms were pushing a simplistic "biobabble" myth whereby depression supposedly results straightforwardly from a shortfall of the neurotransmitter serotonin in the brain. No such causation has been established, and the proposal is no more reasonable than claiming that headaches arise from aspirin deprivation.[3] But by insistently urging this idea upon physicians and the public, Big Pharma widened its net for recruiting patients, who could be counted upon to reason as follows: "I feel bad; I must lack serotonin in my brain; these serotonin-boosting pills will surely do the trick."[4] Thus millions of people who might have needed only counseling were exposed to incompletely explained risks. Those risks, Healy perceived, included horrific withdrawal symptoms, such as dizziness, anxiety, nightmares, nausea, and constant agitation, that were frightening some users out of ever terminating their regimen—an especially bitter outcome in view of the manufacturers' promise of enhancing self-sufficiency and peace of mind. The key proclaimed advantage of the new serotonin drugs over the early tranquilizers, freedom from dependency, was simply false. Moreover, the companies had to have known they were gambling wildly with public health. As early as 1984, Healy reports, Eli Lilly had in hand the conclusion pronounced by Germany's ministry of health in denying a license to fluoxetine (later Prozac): "Considering the benefit and the risk, we think this preparation totally unsuitable for the treatment of depression." As for the frequently rocky initial weeks of treatment, a troubling record not just of "suicidality" but of actual suicides and homicides was accumulating in the early 1990s. The drug firms, Healy saw, were distancing themselves from such tragedies by blaming depression itself for major side effects. Handouts for doctors and patients urged them to persist in the face of early emotional turmoil that only proved, they were told, how vigorously the medicine was tackling the ailment. So, too, dependency symptoms during termination were said to be evidence that the long-stifled depression was now reemerging.
The most gripping portions of Let Them Eat Prozac narrate courtroom battles in which Big Pharma's lawyers, parrying negligence suits by the bereaved, took this line of doubletalk to its limit by explaining SSRI-induced stabbings, shootings, and self-hangings by formerly peaceable individuals as manifestations of not-yet-subdued depression. As an expert witness for plaintiffs against SSRI makers in cases involving violent behavior, Healy emphasized that depressives don't commit mayhem. But he also saw that his position would be strengthened if he could cite the results of a drug experiment on undepressed, certifiably normal volunteers. If some of them, too, showed grave disturbance after taking Pfizer's Zoloft—and they did in Healy's test, with long-term consequences that have left him remorseful as well as indignant—then depression was definitively ruled out as the culprit. Healy suspected that SSRI makers had squirreled away their own awkward findings about drug-provoked derangement in healthy subjects, and he found such evidence after gaining access to Pfizer's clinical trial data on Zoloft. In 2001, however, just when he had begun alerting academic audiences to his forthcoming inquiry, he was abruptly denied a professorship he had already accepted in a distinguished University of Toronto research institute supported by grants from Pfizer. The company hadn't directly intervened; the academics themselves had decided that there was no place on the team for a Zoloft skeptic. Undeterred, Healy kept exposing the drug attorneys' leading sophistry, which was that a causal link to destructive behavior could be established only through extensive double-blind randomized trials—which, cynically, the firms had no intention of conducting. In any case, such experiments could have found at best a correlation, in a large anonymous group of subjects, between SSRI use and irrational acts; and the meaning of a correlation can be endlessly debated. In contrast, Healy's own study had already isolated Zoloft as the direct source of his undepressed subjects' ominous obsessions. Thanks partly to Healy's efforts, juries in negligence suits gradually learned to be suspicious of the "randomized trial" shell game. The plaintiffs' lawyers in some of these cases cited his research. But this David doesn't suppose that he has felled Goliath. As he explains, a decisive improvement in the legal climate surrounding SSRIs came only after Eli Lilly bought the marketing rights to a near relative of its own patent-lapsed Prozac. According to the new drug's damning patent application, it was less likely than Prozac to induce "headaches, nervousness, anxiety, insomnia, inner restlessness..., suicidal thoughts and self mutilation" (emphasis added). That disclosure by Prozac's own progenitor neatly illustrates Healy's belief that the full truth about any drug will emerge only when the income it produces has fallen and its defects can be advantageously contrasted with the virtues of a successor product. Meanwhile, Healy wonders, who will now be sufficiently strong and uncorrupted to keep the drug makers honest? The FDA, he notes, is timid, underfunded, and infiltrated by friends of industry; even the most respected medical journals hesitate to offend their pharmaceutical advertisers; professional conferences are little more than trade fairs; leading professors accept huge sums in return for serving the companies in various venal ways; and, most disgracefully of all, many of their "research" papers are now ghostwritten outright by company-hired hacks. As Healy puts it, Big Pharma doesn't just bend the rules; it buys the rulebook. 3.There is, however, one rulebook that does place some constraint on what the drug makers can claim. This is the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders (DSM). Its four editions (plus interim revisions) thus far from 1952 through 1994 specify the psychological ailments that the whole mental health system has agreed to deem authentic. Although "condition branding" by publicists can make normal people feel like sufferers from a given malady, the malady itself must first be listed in the DSM in order for medical treatments to be approved. Can we rely on this guidebook, then, for independent, objective judgment about the identification and treatment of mental complaints? The compilers of each edition have boasted that their named disorders rest mainly on research findings, and most physicians take that claim at face value, as do medical insurers, epidemiologists, and the funders of empirical studies. An acquaintance with the DSM's several versions and with the controversies that shaped them, however, suggests that they tell more about the shifting zeitgeist and the factions within the APA than they do about permanently valid syndromes.[5] Human nature has not metamorphosed several times since 1952, but each DSM has included more disorders than the last. The third edition of 1980 alone, liberally subdividing earlier categories, purported to have unearthed 112 more of them than the second edition of 1968, and by the fourth edition of 1994 there were over 350, marked by such dubiously pathognomonic symptoms as feeling low, worrying, bearing grudges, and smoking. Those stigmata, furthermore, are presented in a user-friendly checklist form that awards equal value to each symptom within a disorder's entry. In Bingo style, for example, a patient who fits five out of the nine listed criteria for depression is tagged with the disorder. It is little wonder, then, that drug makers' advertisements now urge consumers to spot their own defectiveness through reprinted DSM checklists and then to demand correction via the designated pills. It would be a bad mistake, however, to assume that the shapers of the DSM have been deliberately tilting the manual away from humane psychotherapy and toward biological and pharmaceutical reductionism of the sort exemplified by the serotonin-deficit theory of depression. That very assumption vitiates Christopher Lane's conspiracy-minded book Shyness, which begins plausibly enough as an exposé of the campaign to have shy people view themselves as mentally ill. Unfortunately, Lane couples that theme with a histrionic dismissal of the DSM that is too uncomprehending and partisan to be taken seriously. Lane is not a psychiatrist but a psychoanalytic literary critic who aligns himself with such empirically insouciant authorities as Jacques Lacan, Elisabeth Roudinesco, and Adam Phillips. Like many another Freudian, he is still in shock over DSM-III of 1980 —the edition that consigned the "neuroses" to limbo, favored descriptive over depth-psychological accounts of disorders, and established the uniform symptom-tallying procedure for certifying a diagnosis. For Lane, the very attempt to clarify disorders according to their detectable traits constituted a spiteful purging of "almost a century of [psychoanalytic] thought" and thus a reversion to "Victorian psychiatry." He assumes that anyone who hesitates to endorse etiologies based on quarrels between the homuncular ego and superego must be hostile to all mental complexity and hence to psychotherapy in general. That is his charge against DSM-III and DSM-IV. In fact, however, the manual has never stated or implied a preference between talk therapy and pills. If it had done so, it could hardly have served as the consensual guidebook for such a heterogeneous organization as the APA.
In The Loss of Sadness Horwitz and Wakefield discuss the same 1980 change of direction by the DSM that leaves Christopher Lane fuming. As these authors show, the APA leadership's intentions in the late 1970s had nothing to do with pushing drugs and everything to do with lending greater scientific respectability to the psychiatric field. What was wanted thenceforth for the DSM was improved validity and reliability, by virtue of identifying disorders more accurately and providing means of detection that would render several diagnoses of the same patient less divergent. This remains the DSM's formal goal, however elusive, and it is plainly appropriate and irreversible. What we should really be asking is whether the DSM has approached that goal or merely gestured toward it through the false concreteness of checklists, implying that newly minted disorders are as sharply recognizable as diabetes and tuberculosis. As Horwitz and Wakefield put it, "the reliability might just represent everybody together getting the same wrong answer." Horwitz and Wakefield's argumentation is as understated as Lane's is melodramatic. Because these collaborators maintain a constructive, scholarly tone and display a total command of the pertinent literature, they will gain a respectful hearing from psychiatrists. Those readers will discover, however, that The Loss of Sadness amounts to a relentless dismantling of the DSM—one that seems confined at first to a single inadequacy, only to blossom into an exposure of the manual's top-to-bottom arbitrariness. I am not sure, in fact, that the authors themselves understand the full gravity of the challenge they have posed for American psychiatry. At the core of their book lies a demonstration that episodic sadness has always been a socially approved means of adjusting to misfortune and that much is lost, both medically and culturally, when it is misread as a depressive disorder. Yet as Robert L. Spitzer, the chief architect of DSM-III and Christopher Lane's bête noire, concedes in a generous foreword, the manual has propagated that very blunder by failing to clarify the difference between environmentally prompted moods—those responding to stress or hardship—and dysfunctional states persisting long after the causes of stress have abated. In no sense, however, can that indictment be confined to just one disorder. The Loss of Sadness implies that nearly every nonpsychotic complaint is subject to overdiagnosis unless contextual factors— familial, cultural, relational, financial —are weighed in the balance. As might be expected, then, Horwitz and Wakefield end by begging the compilers of DSM-V (now projected for 2012) to teach their colleagues the need for inquiry into each patient's circumstances before concluding that they are faced with a bona fide disorder. The bar for authentic pathology must be set higher. If this is done, the authors declare, the DSM will be more scientifically respectable; its users, instead of regarding disadvantaged classes as infested with mental illness, will gain an appreciation of socioeconomic reasons for unhappiness; and a brake will be placed on the expensive middle-class hypochondria that the drug companies have so assiduously encouraged and exploited. All of which would be wonderful, but the scenario is shadowed by Horwitz and Wakefield's own shrewd analysis of the status quo and its beneficiaries. The DSM's laxity about winnowing vague discontents from real maladies is, in financial terms, highly functional for many of its practitioners and their patients. As the product of a guild whose members seek payment for treating whatever complaints are brought to them, the manual must be biased toward overmedicalizing so that both doctors and patients can be served under managed care. As Horwitz and Wakefield themselves observe: The DSM provides flawed criteria...; the clinician, who cannot be faulted for applying officially sanctioned DSM diagnostic criteria, knowingly or unknowingly misclassifies some normal individuals as disordered; and these two errors lead to the patient receiving desired treatment for which the therapist is reimbursed. What motive would the APA, as a practitioners' union, have for bringing that arrangement to an end? And wouldn't the drug makers, whose power to shape psychiatric opinion should never be discounted, add their weight on the side of continued diagnostic liberality? Horwitz and Wakefield's admirable concern for scientific rationality points us toward some uncomfortable insights about American psychiatry and its role within a far from rational health care system. That system is too cumbersome and too driven by profit considerations to meet the whole society's medical needs; but citizens possessing full insurance, when they feel mentally troubled in any way, won't be denied medication or therapy or both. Nothing more is required than some hypocrisy all around. As for psychiatry's inability to settle on a discrete list of disorders that can remain impervious to fads and fashions, that is an embarrassment only to clear academic thinkers like these two authors. For bureaucratized psychological treatment, and for the pharmaceutical industry that is now deeply enmeshed in it, confusion has its uses and is likely to persist. Notes[1] These matters are discussed in Ray Moynihan and Alan Cassels's Selling Sickness: How the World's Biggest Pharmaceutical Companies Are Turning Us All into Patients (Nation Books, 2005), which also cites the Ricky Williams story. [2] For recently unearthed considerations bearing on the prudent use of these drugs, see Robert D. Gibbons et al., "Early Evidence on the Effects of Regulators' Suicidality Warnings on SSRI Prescriptions and Suicide in Children and Adults," American Journal of Psychiatry, Vol. 164, No. 9 (September 2007), pp. 1356–1363, and Gonzalo Laje et al., "Genetic Markers of Suicidal Ideation Emerging During Citalopram Treatment of Major Depression," American Journal of Psychiatry, Vol. 164, No. 10 (October 2007), pp. 1530– 1538. [3] The serotonin etiology of depression is concisely disputed in Horwitz and Wakefield's The Loss of Sadness, pp. 168–170. See also Elliot S. Valenstein, Blaming the Brain: The Truth About Drugs and Mental Health (Free Press, 1998), and Joseph Glenmullen, Prozac Backlash: Overcoming the Dangers of Prozac, Zoloft, Paxil, and Other Anti-depressants with Safe, Effective Alternatives (Simon and Schuster, 2000). [4] Healy cites Tipper Gore in 1999: "It was definitely a clinical depression.... What I learned about it is your brain needs a certain amount of serotonin and when you run out of that, it's like running out of gas." Contrary to industry propaganda, the brain possesses no known "depression center," and about 95 percent of our serotonin is found elsewhere in the body. By raising serotonin levels, the SSRIs interfere with production of the other natural "feel-good" chemicals, adrenaline and dopamine. In that sense they are hardly as "selective" as we have been led to believe. [5] See two important collaborative critiques by Herb Kutchins and Stuart A. Kirk: The Selling of DSM: The Rhetoric of Science in Psychiatry (Aldine de Gruyter, 1992) and Making Us Crazy: DSM: The Psychiatric Bible and the Creation of Mental Disorders (Free Press, 1997).
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| A Wedding in Classic Story Form. 
Russ Bryant for The New York Times SEA ISLAND, GA., NOV. 3 The newlyweds head for the sand before joining the reception at the Cloister resort. 
Russ Bryant for The New York Times November 25, 2007 Vows Katherine Van Loon and Jon Steitz AT a bar near Yale, Katherine Van Loon figured out what few Ivy League hitters could: how to make solid contact with Jon Steitz, a highly touted pitching prospect. "We easily struck up a lively conversation," said Dr. Van Loon, who was a Yale graduate student when she met Mr. Steitz on an October evening in 2001, just four months after he was chosen by the Milwaukee Brewers in the third round of the Major League Baseball draft. As they spoke, it became apparent that their career plans were moving as fast as Mr. Steitz's 97-mile-an-hour fastball. She learned that he was a thinking man's pitcher. He was wrapping up an undergraduate degree in molecular biophysics and biochemistry at Yale, where his parents, Joan. A. Steitz and Thomas A. Steitz, are professors and researchers in those fields. But he had his heart set on a professional baseball career. Dr. Van Loon, who was completing a master's in public health, revealed that she had a medical career in mind and told Mr. Steitz she would soon be moving on to the Medical College of Georgia. "From a distance, I saw this gorgeous 5-foot-10-inch blond woman," he said. "But once I got to really know Katherine, what really struck me about her was how driven she was, how much she really cared about people and how she would go out of her way to help others." Despite their far-flung plans, they began seeing each other often. By the time Mr. Steitz headed to Phoenix in February 2002 for spring training with the Brewers, he and Dr. Van Loon were romantically involved. "Early on, we got very close," Mr. Steitz said. "We made a pact that no matter where life took us, we would stay together." Yet the subject of his going off to play ball loomed like "this 800-pound gorilla" he said. As he packed his duffel bag, her doubts rose to the surface. "I really liked him," said Dr. Van Loon, now 29. "But I was a little bit heartbroken because he was just 21, and I thought that the chances of anything working out was pretty unlikely." She explained that when Mr. Steitz is "passionate about something, it has his undivided attention. I think baseball was one of those things, and I became the other." By the time she visited him in Phoenix the following month, he had convinced her that their relationship "was really worth a shot," she said. "He was so passionate about us, and about me succeeding in my profession." After spring training, the Brewers shipped Mr. Steitz to a minor league club in Wisconsin. By the fall of 2002, Dr. Van Loon was in her first year of medical school in Georgia and making occasional trips to Wisconsin to watch him pitch. But she was not there on a July day in 2003 when his pitching career came to a halt when the rotator cuff tendinitis in his right shoulder became so painful he could no longer endure it. "From the time I was 5, my goal was to become a Major League player, so I was extremely disappointed," said Mr. Steitz, now 27. When he called Dr. Van Loon with the bad news, she dropped everything and drove to Wisconsin to be with him. With baseball gone, she was the only true love left in his life. "It was a tough time," said Dr. Van Loon, now a second-year resident at Beth Israel Deaconess Medical Center in Boston. "Jon had gone from being this really big deal to sort of having the rug pulled out from beneath him," she added. "I told him that I didn't fall in love with him because he was a baseball player, but because he was an intellectual and fascinating guy." "I think I made him realize that in the end, baseball was not his greatest gift," she said. She kept rooting for him, and Mr. Steitz staged a rally, earning a law degree at Yale and becoming a consultant in Boston for McKinsey & Company, the management consultants. The couple were married by the Rev. J. Kenneth Bryant, a Baptist minister, on Nov. 3 in the Cloister Chapel, on the grounds of the Cloister resort in Sea Island, Ga. The bride entered wearing an ivory gown and champagne-colored satin Jimmy Choo shoes. After the ceremony, a bagpiper led guests to a patio with a spectacular view of the beach, turned golden by the setting sun.. "There are actually three of us Yale pitchers who were drafted, and without pretension, I say Jon was the most talented," said Craig Breslow, the best man, who played with Mr. Steitz at Yale before going on to pitch for the San Diego Padres and the Boston Red Sox. "It's unfortunate that his body didn't hold up, but we like to think that happened for a reason. Perhaps the distance would have worn on the relationship between the two of them and they wouldn't be here today." Brenda Goodman contributed reporting. |
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| Dennis Rodman sued again in Las Vegas November 24, 2007, 5:06 pm PST  Associated Press LAS VEGAS - A former beverage manager at the Hard Rock Hotel has sued Dennis Rodman, claiming the ex-NBA star assaulted her last year by rubbing against her body and slapping her on the buttocks. In her federal lawsuit filed last week, Sara Robinson also accuses her former employer of retaliating against her after she complained about Rodman's behavior. Rodman spokeswoman Shannon Barr declined to comment, and Hard Rock spokeswoman Dorian Cantrell did not immediately return phone calls to The Associated Press on Saturday. In her complaint, Robinson said she was working in the resort's Cuba Libre bar in March 2006 when Rodman, a hotel guest, began "making a scene" by trying to climb atop the bar after failing to gain her full attention. "As Robinson stepped around the bar, Rodman grabbed her, pulled her towards him and rubbed his body against hers," the lawsuit alleges. "Robinson tried to get free from Rodman's grasp at which time he assaulted her by reaching down and slapping her open-handed on the bottom." The complaint, which seeks unspecified damages, claims that Robinson was fired after she filled out a voluntary statement detailing Rodman's actions in a subsequent incident at the same bar the next month in which he is also accused of causing a scene. The document accuses Rodman of assault and battery, and the Hard Rock Hotel of negligence by failing to protect her from Rodman's "harassing conduct," the Las Vegas Review-Journal reported. Rodman, 46, is no stranger to lawsuits in Las Vegas. In 2001, a state jury awarded former Mirage craps dealer James Brasich $80,000 in a case against Rodman. Brasich said Rodman humiliated him by rubbing dice on his head, chest, stomach and genitals during an October 1997 craps game. Rodman appealed the verdict, and both sides later reached a confidential settlement. Copyright © 2007 Yahoo! All rights reserved |
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Saturday, November 24, 2007 | Web Readers to Fill the Pages of Magazines 
Jim Wilson/The New York Times Paul Cloutier with the magazines JPG and Everywhere from his company. November 24, 2007 Publisher Gets Web Readers to Fill the Pages of Its Magazines By EVELYN NUSSENBAUM SAN FRANCISCO, Nov. 21 — A funny thing happened while Halsey Minor was trying to kill print journalism. He ended up publishing magazines — big, heavy magazines, with beautiful pictures on quality paper — the kind he and others had declared obsolete. The founder of the technology news site CNet.com readily admits to an about-face. "I spent my time at CNet talking about how print was going to be challenged by the Internet and specifically how we were going to make magazines go away," he said. "But two years ago I realized I was still reading over 100 magazines a month. I like holding them and turning the pages. And the images are better than on the Internet." Amid the YouTube-fueled craze for user-generated content, he wondered why readers, instead of writers and editors whom he would have to pay, could not do most of the heavy lifting. He also pondered how he might get rid of, or at least reduce, the large ad sales staff. He just was not sure how to pull it off. Then in 2006 he met Paul Cloutier and Derek Powazek, Web-publishing veterans who were publishing a user-generated on-demand photo magazine called JPG. One issue took e-mail submissions and used a self-publishing service to sell downloads or print copies with the founders' favorites. They wanted to expand. Mr. Minor, who has backed a number of successful ventures since CNet — including Salesforce.com, which went public, and Grand Central, which was sold to Google — had money to invest. A few weeks later, in June, 8020 Publishing was born. It was named after the proverbial ratio of passive Web users (sometimes called lurkers) to those who actually write and contribute. Mr. Minor wants to build the company into an empire of Web-generated print magazines. "Dan Rather was a pivotal moment for me," he said, referring to the way bloggers discovered inconsistencies in the anchorman's 2004 "60 Minutes" story about President Bush's military service. "You can be an 'expert,' but the collective way is so much richer and deeper that it's almost impossible to compete with." He is hardly the only one with the idea of using user-generated content to make money. Many Web sites, like YouTube or Yelp, thrive on content that users donate. The Al Gore venture CurrentTV is a cable channel devoted to videos submitted by the general public. Google recently filed a patent for user-generated content publications. But 8020 is different because Mr. Minor thinks he can also make money from old-fashioned print. Online readers vote on their favorite submissions appearing at JPGmag.com. Then a tiny staff of 10 designs a layout for the winners and about 50,000 high-quality slick-looking magazines are printed six times a year. They are sold through $25 annual subscriptions and on newsstands for $6 each. The online version is free. Readers can also download and print a PDF file of the entire magazine free, because the publishers assume that physically holding a high-quality magazine is more satisfying than viewing it online and therefore will not cannibalize newsstand sales. Even with that freebie, Mr. Minor says that 70 percent of his magazines on newsstands are purchased, a surprisingly high "sell-through" rate; most magazine publishers would be thrilled with 50 percent. The start-up was not without turmoil. Mr. Powazek (along with his wife, Heather Powazek Champ, also at the magazine since its founding) left 8020 in May, saying that a power-hungry Mr. Cloutier had pushed him out. On his blog, Powazek.com, he accused Mr. Cloutier and Mr. Minor of minimizing his contributions to the new and old versions of JPG. He was particularly upset that the earliest issues had been taken off the site. Mr. Powazek said he did not realize his influence would be diminished so severely when he agreed that Mr. Cloutier should run 8020. He also laid claim to the idea for 8020, pointing out that he and his wife put together the first e-mail-driven version of JPG without Mr. Cloutier. While he no longer has a role at 8020, Mr. Powazek still owns a small percentage of JPG. Mr. Cloutier does not dispute that the partnership ended badly or that the first issues were taken off the Web site. But he said it was necessary to distinguish between the incarnations of the magazine, since the new one was so different. And he said Mr. Powazek obstructed the introduction of the new company and magazine and alienated the staff members by refusing to let newcomers contribute to what he saw as his baby. Nevertheless, Mr. Minor and company are so happy with the business model that they have produced a second user-generated magazine called Everywhere, devoted to travel. It went on sale last week. "You're going to see more of this," said Samir Husni, who is chairman of the journalism department at the University of Mississippi and writes the well-known magazine business blog Mrmagazine.com. "I don't think it's just about getting cheap content into a magazine. Seeing their own work in print makes people feel like part of a community." Community is a mantra Mr. Minor and Mr. Cloutier, now chief executive of 8020, repeat often. The JPG and Everywhere sites have lots of what the staff calls "easy jumping-in points" — features meant to get users involved without intimidating them. "Ask someone to write a magazine story and they freeze up," said Mr. Cloutier, who has designed magazine Web sites and helped start CurrentTV. "But say 'send us a postcard' and it becomes easy." Users can submit photos, writing and travel recommendations to Everywhere and comment on everything. If a comment is popular enough, it might end up in print under someone else's photo. 8020 tries to make the magazine more readable by limiting advertising. Web ads are subtle — no pop-ups. The dozen or so advertisers in the print issues are limited to the first few pages, the back, and sponsorships of special sections. Adobe Systems, Sony, Epson, Audi and Virgin America have bought ads. 8020 can afford to limit advertising because, Mr. Minor said, it does not need it to make a profit from them. It says it makes money on each subscription and newsstand sale — the opposite of the traditional magazine business. And while JPG's circulation is only 18,000 subscriptions, the company said it needed to sell just 30,000 to break even on each issue. The small print runs and low overhead leave money for quality paper, an increasing rarity among magazines. It is also reflected in the content. Data, like hotel phone numbers and addresses, is likely to be on the Web but not in a print version of Everywhere. Longer stories and photo essays might be featured solely in print. Now they will see whether users share their vision. In the meantime, Mr. Minor and the 8020 staff are kicking around ideas for the next magazine. Mr. Minor said he was in the venture for the long haul. "I would be really upset if it didn't work because it should work," he said. "We should be able to build a large media company based on people publishing for themselves."
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| Vegas casino king Wynn sets sights on Macau by Steve FriessSat Nov 24, 12:45 PM ET He helped Las Vegas shed its image as a sleazy gambling capital and make inroads as a family holiday destination, and his top-notch hotel restaurants have put Sin City on the culinary map. Now tycoon Steve Wynn has his sights firmly trained on expanding his business in the former Portuguese colony of Macau as he looks to scale the next high point of what has been an already heady career. The 65-year-old's reputation was burnished further last week when the prestigious Michelin Guide announced its first Las Vegas edition, showering honors on Wynn's restaurants across the city. His 2.7 billion dollar resort on the Las Vegas Strip earned Michelin's highest rating of five pavilions; three of the hotel's restaurants earned stars in the respected gastronomic guide. But while Wynn said he was excited by the success of his Las Vegas flagship, he hopes it will one day pale in comparison with the reputation of the resort he intends to build on Macau's Cotai strip in the next decade. The aim, Wynn told AFP, is to "create the most beautiful hotel ever built." "We're not going to be the biggest, we're not going to have the most amount of square footage, we're not going to have the most amount of rooms or the biggest casino or any of that jazz," Wynn said. "We're just going to have the nicest place anybody has ever walked into." That vague description of the unnamed, still-undesigned and unbudgeted property is a jab at WynnÂ?s chief rival in Las Vegas and Macau, Las Vegas Sands Inc., which this summer opened the mammoth 1.8 billion dollar Venetian Macau, reputed to be the world's second-largest building and largest casino, on an area of reclaimed land on the Chinese Special Administrative Region. It takes a certain amount of hubris to make such a vow, but WynnÂ?s track record as the visionary who remade Las Vegas twice has forced the world to take even his most over-the-top claims seriously. "If he says he's going to, I put the odds at at least 50-50 that he will," said Anthony Curtis, publisher of the Las Vegas Advisor newsletter. Wynn is accustomed to skeptics. In 1989, when he opened Vegas' first mega-resort, the Mirage, most observers predicted its failure. Instead, it was wildly successful and set off a themed-casino building boom in the 1990s that included the construction of the Treasure Island, the New York-New York and the Luxor. Then, with the Bellagio in 1998, he bucked conventional wisdom by proving that Vegas tourists would pay for high-end rooms, shopping and dining. In 2000, his company was bought out, so he bought a new piece of property and constructed the Wynn Las Vegas with a hitherto unseen level of opulence. That effort, too, had doubters, but now no less an authority than Michelin has recognized it. Wynn Las Vegas is the only resort in the world with three star-rated restaurants and only one of eight to receive the five-pavilion award. "For Vegas in general, this means the international snobbery regarding things like great culinary offerings here almost has to be swept completely out," said Curtis. The Michelin outcome was yet another case of one-upmanship for Wynn over his chief rival in Vegas and Macau, Sands' chief executive Sheldon Adelson. Wynn delights in noting that the Venetian Las Vegas had no star-rated restaurants. "Most of theirs are secondary restaurants, they've got a chef's name on them but thatÂ?s not who's cooking dinner," Wynn said. Still, Wynn doesnÂ?t dwell for long on his triumphs, what with additions to Wynn Las Vegas and Wynn Macau under construction. The Vegas addition, Encore, is a 2.1 billion dollar, 2,034-room tower due in 2009, while in Macau the Diamond Suites tower is due in 2010. The appetite of the Chinese for all his offerings, not just his baccarat tables, has astounded Wynn. The 2,815-square-foot Louis Vuitton shop in Wynn Macau did 54 million dollars in sales in the past year, making it the top-performing Louis Vuitton store and among the most profitable retail spaces in the world. A Rolex store does 40,000 in business a day in a 700 square foot space. "Chinese customers are not new to us, weÂ?ve been dealing to them for 25 years in Las Vegas," Wynn said. "When we were first building over there, I was always talking to them. 'What should I do, what should I do?Â? IÂ?d ask. And they said, Â?Do what you did in Las Vegas, Steve.Â?" Despite the grand plans for Macau, Wynn said he's not seeking vast numbers of new countries to extend his empire into. He made several trips to Russia before giving up on the idea because of red tape and unappealing locations. "If it was Moscow it would be different, but that's not what theyÂ?re doing there," he said. "New York City, Miami Beach, London, maybe. Tokyo, yeah. "But to go to a some developing area of Eastern Europe, I donÂ?t think thatÂ?s important to us." Copyright © 2007 Agence France Presse |
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| Rosie Perez Hanging Out in New York 
Angela Jimenez for The New York Times SHOP TALK Rosie Perez, who is starring in "The Ritz," and Brett Ratner, the director, at Socialista November 25, 2007 A Night Out With The Afterbath By WINTER MILLER ROSIE PEREZ prides herself on her waitressing skills and her ability to make a perfect mojito, but on a trek to Socialista, the West Village restaurant and lounge, she was content to have someone else serve her. Ms. Perez — the choreographer turned actress turned documentary filmmaker — was fresh from a performance of "The Ritz," a revival of the Terrence McNally comedy in which she stars as a bathhouse chanteuse. "The Ritz" is one of the few Broadway shows unaffected by the stagehands' strike. She had removed the eyeliner and glitter remaining from what she said had been a dozen wardrobe changes, five wigs and four makeup styles, and had transformed into a downtown knockout, replete with gold hoop earrings, a low-cut V-neck black cocktail dress and boots with three-inch heels. Ms. Perez was seated at a corner table, where what appears to be a basement speakeasy gives way to a Cuban oasis with bright blue walls, dim lights and a dusty pair of boxing gloves hanging in one corner. "I love this place," Ms. Perez said. "But it's so politically incorrect. There's a big fat picture of Fidel." Eyeing the boxing gloves, she professed a love of the sport and rattled off a detailed list of her favorite bantam- and welterweights. Ms. Perez's mojito hadn't touched her lips when five of her "Ritz" cast mates, a dresser for the show and some friends arrived, forcing a move to a back table beneath a stylized beige palm. "It's amazing how this cast has become its own universe," said Ashlie Atkinson, an actor from "The Ritz." If the evening had a recurring theme, it was wonderment at the close offstage family they've created, a camaraderie pierced only when a nosy reporter asked Ms. Perez her age. "It's rude to ask a lady her age or her weight," she quickly replied. In Spanish, Ms. Perez ordered appetizers for her entourage: pechuga y piernita (a chicken dish so good it was ordered twice), tostones (fried plantains), duck leg empanadas, bocadillos (pork sandwiches) and giant prawns. Ms. Perez sipped her mojito and pronounced it perfect. A few swallows later, she added water to her drink, commencing a cycle of sipping and distilling that would horrify a bartender. "I'm not a drinker," Ms. Perez explained. As plates were passed around, Ms. Perez told her cast mates Kevin Carolan, 39, and Ms. Atkinson, 30, about her college days in California working at Sizzler, the chain restaurant. She described herself as "bossy, but kind" and well liked by her customers. "I got fired because the manager wanted to go out with me and he couldn't go out with employees," Ms. Perez said. So, her listeners wondered, what did she do? "I went out with him," Ms. Perez said. She flashed a wicked smile. After a trip upstairs to the lounge, where Ms. Perez bumped into the director Brett Ratner, a friend since the 1980s, she hugged her cast mates good night. It was half past 1 in the morning, and she wanted to go home to her boyfriend and her dogs, Sammy Samowitz and Rainy Raindrops. "You've got to rest your body or you cheat the audience," Ms. Perez said. With a grin, she was gone.
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| Generals, Gadgets, and Guerrillas iPHONE, iCONQUERED The age of the media gadget is here, with Apple steamrolling the big distributors. But when consumers have the power to get content anywhere, anytime, for free, even Steve Jobs should be worried. by Michael Wolff December 2007 It's the age of the media gadget. The gadget is the culture. Possibly it's just the age of the iPhone-iPod-iTV-iCar. But I don't think so. I think Steve Jobs and Apple are merely the sharpest promoters of gadgetism—the gadget as accessory is Steve's accomplishment. Apple's gadgets have only one beginning and one end: from Jobs to you, writes Wolff. Illustration by John Corbitt. But fashion and status are only two aspects of the gadget world. (At the most recent Allen & Company media-mogul conference, in Sun Valley, it was important not just to have an iPhone but to have been sent one by Steve himself, and then, giving corporate ethics rules their due, to mention you'd sent him back a personal check.) The real point of the gadget, and a reason, beyond fashion, why people are so proud to display their gadgets, is that it sticks it to some larger, more cumbersome, less responsive media system. A little gadget takes on the big networks (so it's a minor irony that the guys at the Allen & Company conference, who own the networks, are gadget-crazy). A marketer would call this empowerment—as a consumer you're getting the service you want at the time and place you want it, more cheaply than you could have ever hoped to get it, as well as, often, critical help in stealing the particular service or tune. Men with big jobs in big corporations have a word for this anywhere-anytime (let-us-help-you-steal-it) breakdown in distribution norms: anarchy. They've, in fact, had laws passed to inhibit it. But more and more, as gadgetism explodes, as it undermines every fixed notion of who delivers what to whom, as the big men with big jobs try to develop their gadget strategies, it's comedy too. Everybody in charge of distribution channels is running around like a chicken with its head cut off. People at music companies, television networks, movie studios, cable providers, phone companies, and satellite systems are all trying, vainly so far, to figure out their place in a gadget-driven world, and are, mostly, looking like fools. NBC, in a huff, recently pulled its stuff from Apple's iTunes downloading service because it believes its shows are worth more than $1.99 apiece. Then, in an about-face, the network announced it will give away its shows for free—figuring that somehow they'll rig it up, those technological geniuses, so that after you download a show to your gadget and you see it once or twice, the show will dissolve or explode, or some such. A gadget, it's important to note, isn't strictly a device—it's something of a metaphor. A gadget, in whatever form, does something both better and more precisely than it was done before (including more efficient theft). Google is not a gadget—it's too broad, too large (it's more an operating system, in terms of metaphor). Gadgets have catchy functions: Google calls its blog-search tool—which, inserted on your home page, can keep you abreast of what anyone is saying about you—a gadget. A kind of gossip gadget. Dan Dubno, a gadgeteer who hosts the annual Gadgetoff, the premier competition for gadget inventors, in New York, and who introduced the developers of satellite maps to Google, calls the maps a gadget. Everybody's G.P.S., with that dominatrix voice telling you where to turn, is a gadget. Your cell phone is a gadget (though not a very good one). And many of the boxes connected to your television are gadgets (silly, cumbersome ones). Though sometimes gadgets are called widgets. Widgets are the little, well, gadgets you can put on your Facebook pages to, for instance, notify you about somebody's especially sexy playlist (meaning they are a sexy person). What we're talking about are fine-tuned gizmos that customize and distribute information, that, mostly, you can carry around, and that have sucker-punched, and are now revolutionizing, the media world. While the gadget has been, heretofore, an ancillary or even rebel device—the MP3 player began the great digital-media rebellion—Apple's gadgets now threaten a total takeover. This means that Steve Jobs, up until recently a heroic or at least charming figure, is more and more the resented, oppressive one. First, there is his messianic success, based mostly on the developments of other gadgeteers, which increasingly makes people nuts. Then there are Steve's so far successful efforts to use his gadget army to dominate and discipline everybody else. He controls the means by which people consume media as they move (it turns out that great numbers of people want their media, as confoundingly as they want their food, served on the run). So he can tell you at what price you have to sell your stuff—your music or your sitcoms or your audiobooks. Steve's price is, not surprisingly, less concerned with rewarding the person who has created the stuff than it is with making people buy more of his gadgets. And then there are the people whom, because he could, Steve charged $200 more for an iPhone than he'll be charging everyone else. They're pissed at his bigfoot gadgetism and their own gadget chumpness. (I'm one of those people.) But gadgets are inevitably undermined by other gadgets—putting Steve in a precarious position, too. The point about iProducts is that Steve controls them. They have only one beginning and one end. From Steve to you. You have to go through Steve's store—it's a company store in a company town. But here are two guys, Nathaniel Wice, a former music-magazine editor who went to the Wharton business school, and Josh Hochman, a Brooklyn surfer dude, who've developed a gadget just coming off production lines in China, which links up your heretofore solipsistic iPod to someone else's iPod, so we can all become mini-iCenters and re-distributors. The iProducts, the Wal-Mart of gadgets with all their heavy-handed protocols and restrictions, turn into, courtesy of Wice and Hochman's miShare gadget, merely hard drives, storage devices, warehouses, enabling us all to become our own little sharing, networking retail establishments. (In the new information world, the last thing you want to be, the lowest point on the food chain, is just a storage unit—that's the kick-me position.) You can, in the office, or on the subway, pass your files, movies, tunes, playlists, to somebody else (while, in a networked world, this physical connectivity seems a little primitive, you get the point—where there's the will, there's the gadget wherewithal). So Steve's central source no longer is in control. Rather, the gadget itself rules—facilitating convenience, organic human behavior, and, naturally, copyright theft. And yet, while the power and supremacy of the gadget are, more and more, evident to everybody—the iPhone really hoists the gadget to a pop-cultural pedestal—there's still a lot of conceptual confusion about exactly who's going to lose his or her job because of the rise of the gadgets. For instance, there remains the belief, which became the reassuring mantra about 10 years ago, that the natural progression of content and technology was toward some primary and central device. This was called "convergence." Indeed, there has been an enormous amount of effort and expense devoted by the hardware and software manufacturers to create and control this mythical convergence box. The stakes seemed great: someone would rule by dint of operating system, or distribution muscle, or hardware design (or a combination of all three). It was the super-television concept. This seemed like an O.K. outcome if you were part of the great content-creating complex. Content was king and, obviously, the necessary product to be retailed through whatever system or hardware was developed. Content, branded content, would always be in high demand, and it wouldn't matter, ultimately, how it got into the home—and content-makers would be able to charge whatever the market would bear. Except if it was stolen, but that's another story. Some of the serious gadgets that seemed most likely to rule were the gaming systems, Xbox, from Microsoft, or PlayStation, from Sony, or any number of set-top solutions proposed by the cable companies. But Xbox and PlayStation, beyond the issues of their chronic development and delivery problems, turned out to be fixed platforms in a mobile world. Also, they turned out to be too generalized in their promises—while these mighty processors could, theoretically, do practically everything, they didn't solve any problems. Gadgets are about specificity: what precise job is handled well. That's what's cool (as well as how it helps you steal). Cable-system operators didn't get the gadget ethos, either. With their big and dependent audiences they had what seemed like a no-lose opportunity to control the world with a felicitous gadget. But they failed. First, they have terrible technology. Their boxes and services are unreliable—and dumb. Why can't you search on a cable box? What's that about? You mean I can't send this episode of Entourage to my mom? Hello? True, in an effort to compete with TiVo, the gadget undermining fixed programming (and advertising), the cable M.S.O.'s (multiple-system operators) gave away their own D.V.R.—a generic TiVo—which, while too kludgy and unappealing and immobile to create any user loyalty, did what gadgets do, which is to change their users' behavior and expectations. This further undermined the entire premise of television, leading to massive piracy and YouTube, which created new sources of video content, merely waiting for a new gadget to port this content from the Internet to the television, bypassing cable systems. Good show. An equal kludginess and failure to connect the dots applies to cell-phone-makers and mobile-system providers. They are, in a sense, the true progenitors of the gadget era. And yet no cell phone has managed to become the gadget pièce de résistance. There was the Razr, which enhanced gadgetism but hastened its own obsolescence—it was cool, but not cool enough. And now comes the iPhone. It offers not only gadget functionality but gadget sensibility too, heavy on the positive gadget experience. And that's the state of gadgeting art: the elegant gadget, the wow gadget. (Forgetting about the fact that the iPhone doesn't work very well—mail sucks, keyboard laughable.) The wow standard is, however, likely to be undermined, too. The Google phone, in super-secret development, takes an approach that's radically different from Apple gadgetism. Seeing design as authoritarian, Google (gadget spies and gadget-rumor mongers say) will go vanilla—and may even give the phone to you. It wants to get rid of all the rules. It really wants to go for anarchy. Of course, this is an anarchic world that Google will control. Gadgeteers are always trying to replace another gadget which formerly had control so the new gadget can have control. Replacing the gadget it has undermined, the new gadget becomes the gatekeeper and toll taker—the thing Apple has done, to everybody's great and growing consternation, so well. But Google's gadget will, undoubtedly, and counter-intuitively, seek to pull the rug out from under Apple, countering Apple's closed system by offering an open-access world, one where anything is permissible—alongside Google ads—and thereby achieve super-dominance for itself. Google's phone will give you (at least such is the speculation) just the Web in your pocket—for free. There may not even be a data provider (as in Apple making deals with data providers for what stuff you'll see on the iPhone), and, possibly, no cell-phone service either. Just free calls over free Wi-Fi networks. And all the I.M.-ing you want (no texting charge from AT&T, as with the iPhone). Possibly no charges at all. Just Google serving ads in your pocket. Simple, sturdy, and open. And Google learning every single last detail about you that it doesn't already know. What about the content people, those former kings? If the way we consume all types of entertainment and information is changing, what happens to the people (and the fortunes of the people) who produce the entertainment and information? This is, in every meeting of media suits, in every contract discussion, in every Hollywood union negotiation, the fundamental, inchoate, and addled existential question. What is to become of us? And who gets paid? (It is actually possible, and comic, that, of all the parties trying to screw one another in these meetings and negotiations, none will get the dough. Some yet-to-be-invented-gadget guy will run off with it.) We are "platform agnostic," Arthur Sulzberger Jr., the publisher of The New York Times, has said, grandly, in a direct challenge to Marshall McLuhan, who, two generations ago, laid down the central law of mass media, that the medium is the message. What Sulzberger hopes for is that whatever he and his cohorts are creating can be merely sent over to whatever gadget people are using. In this view, there's a sort of content mother ship, which sends its content spawn out to content receivers, or some such. This has been the similarly wishful notion of sitcom producers, and music promoters, and network executives. Indeed, there are more and more business-development teams populating the media world, dedicated to striking deals with the makers of the new gadgets. But the problems with this ideal of simple transference become more manifold every day. For one thing, the gadget-makers are much less impressed with the value of the content than the content-makers are. (Various consortiums of old-media behemoths are vowing to band together to build their own iStores and charge what they want to charge—good luck with that.) For another thing, media and behavior and desire are pretty finely linked (this is part of what McLuhan was so cryptically saying). It turns out that if you're moving you want information and entertainment to be different than if you are sitting. (I'm too old to have paid any attention to what's actually on YouTube until, waiting on some line or other, I pushed the YouTube button on my iPhone. I may be among the last to know: many of the most popular videos on YouTube, which cost little to produce and which nobody is getting paid for, are more diverting than anything on television.) Still, there remains a certain stubborn determination to use technology to deliver the one true thing. Fujitsu has in development a futuristic roll-up screen, the Flepia (believe it or not), which will reproduce with startling colors and definition actual magazine and newspaper pages. You'll be able to carry a newsstand, weighing ounces, in your pocket. There are other companies, HP and Sony included, at work on this same concept. It's something of a holy grail of gadgets—a sort of plastic paper that can receive Wi-Fi signals, so your newspaper and magazines download to you. The premise here is that, again, in defiance of McLuhan, the form is irrelevant, or that technology can simply improve on the existing form. While this is theoretically logical—Fujitsu's Flepia thing is merely a more efficient way to distribute and to read a magazine—it will never quite work out. For one thing, control shifts, and now it's Fujitsu's world (instead of, say, Time Inc.'s or Condé Nast's world), and, likely, Fujitsu won't want what magazine publishers want. And, for another, consumers take advantage of almost any opportunity to alter or customize their behavior; once they alter their behavior, the content itself has to be altered, which is never good news for the makers of the old content. There is, too, the Sony Reader—Amazon also has one—a gadget that is in essence designed to facilitate the iTunes download model, but for books. You buy books from an online store and download to your portable book facsimile. This is an entirely intuitive idea, whose time seems to have been on the verge of coming for 10 years now—but it never does. Possibly because these gadgets don't help you steal the book (or possibly because it's a book, so nobody wants to steal it). Any good gadget has to be sly about how it respects digital-rights management (D.R.M.—the thing that prevents you from copying stuff), trying to stay within the bounds of the Digital Millennium Copyright Act, which sends you to jail for cracking somebody's D.R.M. lock. But everybody knows which end is up and what the point really is. Except when they don't. Sony, once the premier gadget-maker, has become an also-ran, not least of all, perhaps, because it bought content-makers Columbia Pictures and CBS Records (now Sony Music). It suddenly found itself in a deeply conflicted position. It declined to give the Walkman (remember the Walkman?) the devious capabilities to help you steal the music Sony was now selling. Sony's chief, Sir Howard Stringer, has become a great defender of traditional copyright rules, at, arguably, the expense of his company's future—at least the great gadget side of his company. Microsoft, as an ardent defender of corporate property, went so far as to have its iPod competitor, Zune, virtuously install copy protection on songs that users had already stolen. Similarly, its media-center package—a P.C. version of a set-top box—is scrupulous and relentless, and counterproductive in the way it stands up for all sorts of protection features that make the ordinary gadget consumer laugh out loud. And, indeed, its gadgets are duds. Content creators—and Microsoft is largely a content creator, whereas Apple, arguably, is a hardware company—have actually tried to wish into existence not just their own pro-protection gadgets but gadgets that will stop other gadgets from stealing their stuff. Technology will defeat technology, in this view. Except that, it turns out, the better technologists are the people partial to stealing stuff—not a few of them 11-year-olds breaking the protection codes. What's more, the very health of the gadget world is based on this massive amount of free and unstuck content. News flash: Gadget-makers want you to steal. And, to feed your gadgets, you do. It is true that, at Apple's store, since it began in 2003, more than three billion songs have been legitimately sold, which sounds like a lot. But, every month, there are three to five billion search requests for illegal downloads from the peer-to-peer file-sharing networks (among them, LimeWire, eDonkey, BitTorrent, Ares). Music-industry estimates figure that you have, on average, 600 to 1,000 songs on your portable gadget of choice: one-third are from CDs in your collection at home; two-thirds you've stolen. Oh, and 20—not 20 percent, 20—you've bought from iTunes. In other words, given this level of theft, the media world ends, eventually. We put ourselves out of business. Soon we will, with our gadgets, have stolen all the music and videos. Except there's always another gadget. Or, in this case, there's the seen and the unseen world of gadgets. Behind your benign gadget there's a gadget war of the worlds. MediaDefender, in a sense more an anti-gadget than a gadget, was developed by some guys out of the electronic-warfare division of Raytheon, where they were working on the radar system for the B-2 bomber. Among its warfare tactics, MediaDefender carpet-bombs the peer-to-peer networks. The old-media guys hire these warfare guys (they are sort of mercenaries, I suppose, in this metaphor) to protect specific titles. Say, the Black Eyed Peas' "My Humps." Then these former weapons-system experts bomb the peer-to-peer networks with millions (or hundreds of millions—whatever) of fake, decoy files. You download mush. Clever. But here's the thing. When behavior changes—in this instance, gadgets giving us license and wherewithal to take whatever diversion we want whenever we want—there is not a lot of profit in trying to change it back. It might be honorable to try, but not profitable. In the media business, it is always better to promote than to inhibit. Rather than try to stand in the way of the ever burgeoning gadget world, and its license and entitlements, the MediaDefender mercenaries have savvily reversed their technology, not to stymie gadgets but to use them. In the end, their approach to solving the problem of making a buck in a gadget world was not, in fact, rocket science, which they understood, but, in media terms, the most obvious solution: turn gadgets into advertising media. Instead of shooting their decoys out there, now the MediaDefender people actually shoot the real thing. They shoot millions of files of this or that title, which, when you download, you download with, say, the Nike swoosh or the Coke ribbon—or other logos, and trailers, and 30-second spots. A sponsor pays, in other words, the content-maker for the privilege of being associated with his song or show. And so, in a way, matching ads with songs and ads with videos, and giving you this for free on your gadgets, we've handily re-created radio and television. Perhaps nothing changes, except the gadgets. Michael Wolff is a Vanity Fair contributing editor. |
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| Dr. Drug Rep 
Illustration by Leo Jung November 25, 2007 Dr. Drug Rep By DANIEL CARLAT I. Faculty Development On a blustery fall New England day in 2001, a friendly representative from Wyeth Pharmaceuticals came into my office in Newburyport, Mass., and made me an offer I found hard to refuse. He asked me if I'd like to give talks to other doctors about using Effexor XR for treating depression. He told me that I would go around to doctors' offices during lunchtime and talk about some of the features of Effexor. It would be pretty easy. Wyeth would provide a set of slides and even pay for me to attend a speaker's training session, and he quickly floated some numbers. I would be paid $500 for one-hour "Lunch and Learn" talks at local doctors' offices, or $750 if I had to drive an hour. I would be flown to New York for a "faculty-development program," where I would be pampered in a Midtown hotel for two nights and would be paid an additional "honorarium." I thought about his proposition. I had a busy private practice in psychiatry, specializing in psychopharmacology. I was quite familiar with Effexor, since I had read recent studies showing that it might be slightly more effective than S.S.R.I.'s, the most commonly prescribed antidepressants: the Prozacs, Paxils and Zolofts of the world. S.S.R.I. stands for selective serotonin reuptake inhibitor, referring to the fact that these drugs increase levels of the neurotransmitter serotonin, a chemical in the brain involved in regulating moods. Effexor, on the other hand, was being marketed as a dual reuptake inhibitor, meaning that it increases both serotonin and norepinephrine, another neurotransmitter. The theory promoted by Wyeth was that two neurotransmitters are better than one, and that Effexor was more powerful and effective than S.S.R.I.'s. I had already prescribed Effexor to several patients, and it seemed to work as well as the S.S.R.I.'s. If I gave talks to primary-care doctors about Effexor, I reasoned, I would be doing nothing unethical. It was a perfectly effective treatment option, with some data to suggest advantages over its competitors. The Wyeth rep was simply suggesting that I discuss some of the data with other doctors. Sure, Wyeth would benefit, but so would other doctors, who would become more educated about a good medication. A few weeks later, my wife and I walked through the luxurious lobby of the Millennium Hotel in Midtown Manhattan. At the reception desk, when I gave my name, the attendant keyed it into the computer and said, with a dazzling smile: "Hello, Dr. Carlat, I see that you are with the Wyeth conference. Here are your materials." She handed me a folder containing the schedule of talks, an invitation to various dinners and receptions and two tickets to a Broadway musical. "Enjoy your stay, doctor." I had no doubt that I would, though I felt a gnawing at the edge of my conscience. This seemed like a lot of money to lavish on me just so that I could provide some education to primary-care doctors in a small town north of Boston. The next morning, the conference began. There were a hundred or so other psychiatrists from different parts of the U.S. I recognized a couple of the attendees, including an acquaintance I hadn't seen in a while. I'd heard that he moved to another state and was making a bundle of money, but nobody seemed to know exactly how. I joined him at his table and asked him what he had been up to. He said he had a busy private practice and had given a lot of talks for Warner-Lambert, a company that had since been acquired by Pfizer. His talks were on Neurontin, a drug that was approved for epilepsy but that my friend had found helpful for bipolar disorder in his practice. (In 2004, Warner-Lambert pleaded guilty to illegally marketing Neurontin for unapproved uses. It is illegal for companies to pay doctors to promote so-called off-label uses.) I knew about Neurontin and had prescribed it occasionally for bipolar disorder in my practice, though I had never found it very helpful. A recent study found that it worked no better than a placebo for this condition. I asked him if he really thought Neurontin worked for bipolar, and he said that he felt it was "great for some patients" and that he used it "all the time." Given my clinical experiences with the drug, I wondered whether his positive opinion had been influenced by the money he was paid to give talks. But I put those questions aside as we gulped down our coffees and took seats in a large lecture room. On the agenda were talks from some of the most esteemed academics in the field, authors of hundreds of articles in the major psychiatric journals. They included Michael Thase, of the University of Pittsburgh and the researcher who single-handedly put Effexor on the map with a meta-analysis, and Norman Sussman, a professor of psychiatry at New York University, who was master of ceremonies. Thase strode to the lectern first in order to describe his groundbreaking work synthesizing data from more than 2,000 patients who had been enrolled in studies comparing Effexor with S.S.R.I.'s. At this time, with his Effexor study a topic of conversation in the mental-health world, Thase was one of the most well known and well respected psychiatrists in the United States. He cut a captivating figure onstage: tall and slim, dynamic, incredibly articulate and a master of the research craft. He began by reviewing the results of the meta-analysis that had the psychiatric world abuzz. After carefully pooling and processing data from eight separate clinical trials, Thase published a truly significant finding: Effexor caused a 45 percent remission rate in patients in contrast to the S.S.R.I. rate of 35 percent and the placebo rate of 25 percent. It was the first time one antidepressant was shown to be more effective than any other. Previously, psychiatrists chose antidepressants based on a combination of guesswork, gut feeling and tailoring a drug's side effects to a patient's symptom profile. If Effexor was truly more effective than S.S.R.I.'s, it would amount to a revolution in psychiatric practice and a potential windfall for Wyeth. One impressive aspect of Thase's presentation was that he was not content to rest on his laurels; rather he raised a series of potential criticisms of his results and then rebutted them convincingly. For example, skeptics had pointed out that Thase was a paid consultant to Wyeth and that both of his co-authors were employees of the company. Thase responded that he had requested and had received all of the company's data and had not cherry-picked from those studies most favorable for Effexor. This was a significant point, because companies sometimes withhold negative data from publication in medical journals. For example, in 2004, GlaxoSmithKline was sued by Eliot Spitzer, who was then the New York attorney general, for suppressing data hinting that Paxil causes suicidal thoughts in children. The company settled the case and agreed to make clinical-trial results public. Another objection was that while the study was billed as comparing Effexor with S.S.R.I.'s in general, in fact most of the data compared Effexor with one specific S.S.R.I.: Prozac. Perhaps Effexor was, indeed, more effective than Prozac; this did not necessarily mean that it was more effective than the other S.S.R.I.'s in common use. But Thase announced that since the original study, he had analyzed data on Paxil and other meds and also found differences in remission rates. For his study, Thase chose what was at that time an unusual measure of antidepressant improvement: "remission," rather than the more standard measure, "response." In clinical antidepressant trials, a "response" is defined as a 50 percent improvement in depressive symptoms, as measured by the Hamilton depression scale. Thus, if a patient enters a study scoring a 24 on the Hamilton (which would be a moderate degree of depression), he or she would have "responded" if the final score, after treatment, was 12 or less. Remission, on the other hand, is defined as "complete" recovery. While you might think that a patient would have to score a 0 on the Hamilton to be in remission, in fact very few people score that low, no matter how deliriously happy they are. Instead, researchers come up with various cutoff scores for remission. Thase chose a cutoff score of 7 or below. In his study, he emphasized the remission rates and not the response rates. As I listened to his presentation, I wondered why. Was it because he felt that remission was the only really meaningful outcome by which to compare drugs? Or was it because using remission made Effexor look more impressive than response did? Thase indirectly addressed this issue in his paper by pointing out that even when remission was defined in different ways, with different cutoff points, Effexor beat the S.S.R.I.'s every time. That struck me as a pretty convincing endorsement of Wyeth's antidepressant. The next speaker, Norm Sussman, took the baton from Thase and explored the concept of remission in more detail. Sussman's job was to systematically go through the officially sanctioned "slide deck" — slides provided to us by Wyeth, which we were expected to use during our own presentations. If Thase was the riveting academic, Sussman was the engaging populist, translating some of the drier research concepts into terms that our primary-care-physician audiences would understand. Sussman exhorted us not to be satisfied with response and encouraged us to set the bar higher. "Is the patient doing everything they were doing before they got depressed?" he asked. "Are they doing it even better? That's remission." To further persuade us, he highlighted a slide showing that patients who made it all the way to remission are less likely to relapse to another depressive episode than patients who merely responded. And for all its methodological limitations, it was a slide that I would become well acquainted with, as I would use it over and over again in my own talks. When it came to side effects, Effexor's greatest liability was that it could cause hypertension, a side effect not shared by S.S.R.I.'s. Sussman showed us some data from the clinical trials, indicating that at lower doses, about 3 percent of patients taking Effexor had hypertension as compared with about 2 percent of patients assigned to a placebo. There was only a 1 percent difference between Effexor and placebo, he commented, and pointed out that treating high blood pressure might be a small price to pay for relief from depression. It was an accurate reading of the data, and I remember finding it a convincing defense of Effexor's safety. As I look back at my notes now, however, I notice that another way of describing the same numbers would have been to say that Effexor leads to a 50 percent greater rate of hypertension than a placebo. Framed this way, Effexor looks more hazardous. And so it went for the rest of the afternoon. Was I swallowing the message whole? Certainly not. I knew that this was hardly impartial medical education, and that we were being fed a marketing line. But when you are treated like the anointed, wined and dined in Manhattan and placed among the leaders of the field, you inevitably put some of your critical faculties on hold. I was truly impressed with Effexor's remission numbers, and like any physician, I was hopeful that something new and different had been introduced to my quiver of therapeutic options. At the end of the last lecture, we were all handed envelopes as we left the conference room. Inside were checks for $750. It was time to enjoy ourselves in the city. II. The Art and Science of Detailing Pharmaceutical "detailing" is the term used to describe those sales visits in which drug reps go to doctors' offices to describe the benefits of a specific drug. Once I returned to my Newburyport office from New York, a couple of voice-mail messages from local Wyeth reps were already waiting for me, inviting me to give some presentations at local doctors' offices. I was about to begin my speaking — and detailing — career in earnest. How many doctors speak for drug companies? We don't know for sure, but one recent study indicates that at least 25 percent of all doctors in the United States receive drug money for lecturing to physicians or for helping to market drugs in other ways. This meant that I was about to join some 200,000 American physicians who are being paid by companies to promote their drugs. I felt quite flattered to have been recruited, and I assumed that the rep had picked me because of some special personal or professional quality. The first talk I gave brought me back to earth rather quickly. I distinctly remember the awkwardness of walking into my first waiting room. The receptionist slid the glass partition open and asked if I had an appointment. "Actually, I'm here to meet with the doctor." "Oh, O.K. And is that a scheduled appointment?" "I'm here to give a talk." A light went on. "Oh, are you part of the drug lunch?" Regardless of how I preferred to think of myself (an educator, a psychiatrist, a consultant), I was now classified as one facet of a lunch helping to pitch a drug, a convincing sidekick to help the sales rep. Eventually, with an internal wince, I began to introduce myself as "Dr. Carlat, here for the Wyeth lunch." The drug rep who arranged the lunch was always there, usually an attractive, vivacious woman with platters of gourmet sandwiches in tow. Hungry doctors and their staff of nurses and receptionists would filter into the lunch room, grateful for free food. Once there was a critical mass (and crucially, once the M.D.'s arrived), I was given the go-ahead by the Wyeth reps to start. I dove into my talk, going through a handout that I created, based on the official slide deck. I discussed the importance of remission, the basics of the Thase study showing the advantage of Effexor, how to dose the drug, the side effects, and I added a quick review of the other common antidepressants. While I still had some doubts, I continued to be impressed by the 10 percent advantage in remission rates that Effexor held over S.S.R.I.'s; that advantage seemed significant enough to overcome Effexor's more prominent side effects. Yes, I was highlighting Effexor's selling points and playing down its disadvantages, and I knew it. But was my salesmanship going to bring harm to anybody? It seemed unlikely. The worst case was that Effexor was no more effective than anything else; it certainly was no less effective. During my first few talks, I worried a lot about my performance. Was I too boring? Did the doctors see me as sleazy? Did the Wyeth reps find me sufficiently persuasive? But the day after my talks, I would get a call or an e-mail message from the rep saying that I did a great job, that the doctor was impressed and that they wanted to use me more. Indeed, I started receiving more and more invitations from other reps, and I soon had talks scheduled every week. I learned later that Wyeth and other companies have speaker-evaluation systems. After my talks, the reps would fill out a questionnaire rating my performance, which quickly became available to other Wyeth reps throughout the area. As the reps became comfortable with me, they began to see me more as a sales colleague. I received faxes before talks preparing me for particular doctors. One note informed me that the physician we'd be visiting that day was a "decile 6 doctor and is not prescribing any Effexor XR, so please tailor accordingly. There is also one more doc in the practice that we are not familiar with." The term "decile 6" is drug-rep jargon for a doctor who prescribes a lot of medications. The higher the "decile" (in a range from 1 to 10), the higher the prescription volume, and the more potentially lucrative that doctor could be for the company. A note from another rep reminded me of a scene from "Mission: Impossible." "Dr. Carlat: Our main target, Dr. , is an internist. He spreads his usage among three antidepressants, Celexa, Zoloft and Paxil, at about 25-30 percent each. He is currently using about 6 percent Effexor XR. Our access is very challenging with lunches six months out." This doctor's schedule of lunches was filled with reps from other companies; it would be vital to make our sales visit count.+ Naïve as I was, I found myself astonished at the level of detail that drug companies were able to acquire about doctors' prescribing habits. I asked my reps about it; they told me that they received printouts tracking local doctors' prescriptions every week. The process is called "prescription data-mining," in which specialized pharmacy-information companies (like IMS Health and Verispan) buy prescription data from local pharmacies, repackage it, then sell it to pharmaceutical companies. This information is then passed on to the drug reps, who use it to tailor their drug-detailing strategies. This may include deciding which physicians to aim for, as my Wyeth reps did, but it can help sales in other ways. For example, Shahram Ahari, a former drug rep for Eli Lilly (the maker of Prozac) who is now a researcher at the University of California at San Francisco's School of Pharmacy, said in an article in The Washington Post that as a drug rep he would use this data to find out which doctors were prescribing Prozac's competitors, like Effexor. Then he would play up specific features of Prozac that contrasted favorably with the other drug, like the ease with which patients can get off Prozac, as compared with the hard time they can have withdrawing from Effexor. The American Medical Association is also a key player in prescription data-mining. Pharmacies typically will not release doctors' names to the data-mining companies, but they will release their Drug Enforcement Agency numbers. The A.M.A. licenses its file of U.S. physicians, allowing the data-mining companies to match up D.E.A. numbers to specific physicians. The A.M.A. makes millions in information-leasing money. Once drug companies have identified the doctors, they must woo them. In the April 2007 issue of the journal PLoS Medicine, Dr. Adriane Fugh-Berman of Georgetown teamed up with Ahari (the former drug rep) to describe the myriad techniques drug reps use to establish relationships with physicians, including inviting them to a speaker's meeting. These can serve to cement a positive a relationship between the rep and the doctor. This relationship is crucial, they say, since "drug reps increase drug sales by influencing physicians, and they do so with finely titrated doses of friendship." III. Uncomfortable Moments I gave many talks over the ensuing several months, and I gradually became more comfortable with the process. Each setting was somewhat different. Sometimes I spoke to a crowded conference room with several physicians, nurses and other clinical staff. Other times, I sat at a small lunch table with only one other physician (plus the rep), having what amounted to a conversation about treating depression. My basic Effexor spiel was similar in the various settings, with the focus on remission and the Thase data. Meanwhile, I was keeping up with new developments in the research literature related to Effexor, and not all of the news was positive. For example, as more data came out comparing Effexor with S.S.R.I.'s other than Prozac, the Effexor remission advantage became slimmer — more like 5 percent instead of the originally reported 10 percent. Statistically, this 5 percent advantage meant that only one out of 20 patients would potentially do better on Effexor than S.S.R.I.'s — much less compelling than the earlier proportion of one out of 10. I also became aware of other critiques of the original Thase meta-analysis. For example, some patients enrolled in the original Effexor studies took S.S.R.I.'s in the past and presumably had not responded well. This meant that the study population may have been enriched with patients who were treatment-resistant to S.S.R.I.'s, giving Effexor an inherent advantage. I didn't mention any of this in my talks, partly because none of it had been included in official company slides, and partly because I was concerned that the reps wouldn't invite me to give talks if I divulged any negative information. But I was beginning to struggle with the ethics of my silence. One of my most uncomfortable moments came when I gave a presentation to a large group of psychiatrists. I was in the midst of wrapping up my talk with some information about Effexor and blood pressure. Referring to a large study paid for by Wyeth, I reported that patients are liable to develop hypertension only if they are taking Effexor at doses higher than 300 milligrams per day. "Really?" one psychiatrist in the room said. "I've seen hypertension at lower doses in my patients." "I suppose it can happen, but it's rare at doses that are commonly used for depression." He looked at me, frowned and shook his head. "That hasn't been my experience." I reached into my folder where I kept some of the key Effexor studies in case such questions arose. According to this study of 3,744 patients, the rate of high blood pressure was 2.2 percent in the placebo group, and 2.9 percent in the group of patients who had taken daily doses of Effexor no larger than 300 milligrams. Patients taking more than 300 milligrams had a 9 percent risk of hypertension. As I went through the numbers with the doctor, however, I felt unsettled. I started talking faster, a sure sign of nervousness for me. Driving home, I went back over the talk in my mind. I knew I had not lied — I had reported the data exactly as they were reported in the paper. But still, I had spun the results of the study in the most positive way possible, and I had not talked about the limitations of the data. I had not, for example, mentioned that if you focused specifically on patients taking between 200 and 300 milligrams per day, a commonly prescribed dosage range, you found a 3.7 percent incidence of hypertension. While this was not a statistically significant higher rate than the placebo, it still hinted that such moderate doses could, indeed, cause hypertension. Nor had I mentioned the fact that since the data were derived from placebo-controlled clinical trials, the patients were probably not representative of the patients seen in most real practices. Patients who are very old or who have significant medical problems are excluded from such studies. But real-world patients may well be at higher risk to develop hypertension on Effexor. + I realized that in my canned talks, I was blithely minimizing the hypertension risks, conveniently overlooking the fact that hypertension is a dangerous condition and not one to be trifled with. Why, I began to wonder, would anyone prescribe an antidepressant that could cause hypertension when there were many other alternatives? And why wasn't I asking this obvious question out loud during my talks? I felt rattled. That psychiatrist's frown stayed with me — a mixture of skepticism and contempt. I wondered if he saw me for what I feared I had become — a drug rep with an M.D. I began to think that the money was affecting my critical judgement. I was willing to dance around the truth in order to make the drug reps happy. Receiving $750 checks for chatting with some doctors during a lunch break was such easy money that it left me giddy. Like an addiction, it was very hard to give up. There was another problem: one of Effexor's side effects. Patients who stopped the medication were calling their doctors and reporting symptoms like severe dizziness and lightheadedness, bizarre electric-shock sensations in their heads, insomnia, sadness and tearfulness. Some patients thought they were having strokes or nervous breakdowns and were showing up in emergency rooms. Gradually, however, it became clear that these were "withdrawal" symptoms. These were particularly common problems with Effexor because it has a short half-life, a measure of the time it takes the body to metabolize half of the total amount of a drug in the bloodstream. Paxil, another short half-life antidepressant, caused similar problems. At the Wyeth meeting in New York, these withdrawal effects were mentioned in passing, though we were assured that Effexor withdrawal symptoms were uncommon and could usually be avoided by tapering down the dose very slowly. But in my practice, that strategy often did not work, and patients were having a very hard time coming off Effexor in order to start a trial of a different antidepressant. I wrestled with how to handle this issue in my Effexor talks, since I believed it was a significant disadvantage of the drug. Psychiatrists frequently have to switch medications because of side effects or lack of effectiveness, and anticipating this potential need to change medications plays into our initial choice of a drug. Knowing that Effexor was hard to give up made me think twice about prescribing it in the first place. During my talks, I found myself playing both sides of the issue, making sure to mention that withdrawal symptoms could be severe but assuring doctors that they could "usually" be avoided. Was I lying? Not really, since there were no solid published data, and indeed some patients had little problem coming off Effexor. But was I tweaking and pruning the truth in order to stay positive about the product? Definitely. And how did I rationalize this? I convinced myself that I had told "most" of the truth and that the potential negative consequences of this small truth "gap" were too trivial to worry about. As the months went on, I developed more and more reservations about recommending that Effexor be used as a "first line" drug before trying the S.S.R.I.'s. Not only were the newer comparative data less impressive, but the studies were short-term, lasting only 6 to 12 weeks. It seemed entirely possible that if the clinical trials had been longer — say, six months — S.S.R.I.'s would have caught up with Effexor. Effexor was turning out to be an antidepressant that might have a very slight effectiveness advantage over S.S.R.I.'s but that caused high blood pressure and had prolonged withdrawal symptoms. At my next Lunch and Learn, I mentioned toward the end of my presentation that data in support of Effexor were mainly short-term, and that there was a possibility that S.S.R.I.'s were just as effective. I felt reckless, but I left the office with a restored sense of integrity. Several days later, I was visited by the same district manager who first offered me the speaking job. Pleasant as always, he said: "My reps told me that you weren't as enthusiastic about our product at your last talk. I told them that even Dr. Carlat can't hit a home run every time. Have you been sick?" At that moment, I decided my career as an industry-sponsored speaker was over. The manager's message couldn't be clearer: I was being paid to enthusiastically endorse their drug. Once I stopped doing that, I was of little value to them, no matter how much "medical education" I provided. IV. Life After Drug Money A year after starting my educational talks for drug companies (I had also given two talks for Forest Pharmaceuticals, pushing the antidepressant Lexapro), I quit. I had made about $30,000 in supplemental income from these talks, a significant addition to the $140,000 or so I made from my private practice. Now I publish a medical-education newsletter for psychiatrists that is not financed by the pharmaceutical industry and that tries to critically assess drug research and marketing claims. I still see patients, and I still prescribe Effexor. I don't prescribe it as frequently as I used to, but I have seen many patients turn their lives around because they responded to this drug and to nothing else. + In 2002, the drug industry's trade group adopted voluntary guidelines limiting some of the more lavish benefits to doctors. While the guidelines still allow all-expenses-paid trips for physicians to attend meetings at fancy hotels, they no longer pay for spouses to attend the dinners or hand out tickets to musicals. In an e-mail message, a Wyeth spokesman wrote that Wyeth employees must follow that code and "our own Wyeth policies, which, in some cases, exceed" the trade group's code. Looking back on the year I spent speaking for Wyeth, I've asked myself if my work as a company speaker led me to do bad things. Did I contribute to faulty medical decision making? Did my advice lead doctors to make inappropriate drug choices, and did their patients suffer needlessly? Maybe. I'm sure I persuaded many physicians to prescribe Effexor, potentially contributing to blood-pressure problems and withdrawal symptoms. On the other hand, it's possible that some of those patients might have gained more relief from their depression and anxiety than they would have if they had been started on an S.S.R.I. Not likely, but possible. I still allow drug reps to visit my office and give me their pitches. While these visits are short on useful medical information, they do allow me to keep up with trends in drug marketing. Recently, a rep from Bristol-Myers Squibb came into my office and invited me to a dinner program on the antipsychotic Abilify. "I think it will be a great program, Dr. Carlat," he said. "Would you like to come?" I glanced at the invitation. I recognized the name of the speaker, a prominent and widely published psychiatrist flown in from another state. The restaurant was one of the finest in town. I was tempted. The wine, the great food, the proximity to a famous researcher — why not rejoin that inner circle of the select for an evening? But then I flashed to a memory of myself five years earlier, standing at a lectern and clearing my throat at the beginning of a drug-company presentation. I vividly remembered my sensations — the careful monitoring of what I would say, the calculations of how frank I should be. "No," I said, as I handed the rep back the invitation. "I don't think I can make it. But thanks anyway." Daniel Carlat is an assistant clinical professor of psychiatry at Tufts University School of Medicine and the publisher of The Carlat Psychiatry Report.
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| Vindicated by DNA, but a Lost Man on the Outside 
James Estrin/The New York Times Jeffrey Deskovic, left, on a subway to Greenwich Village. He was freed last year after 16 years in prison November 25, 2007 Free and Uneasy Vindicated by DNA, but a Lost Man on the Outside As a boy, Jeffrey Mark Deskovic could swim the length of a pool underwater without coming up for air. On sultry days at the Elmira state prison, where he spent most of his 16 years behind bars for a rape and murder he did not commit, Mr. Deskovic would close his eyes under a row of outdoor showers and imagine himself swimming. For months after his release in September 2006, he had been yearning for a chance to dive in, to test his endurance, to feel that familiar sensation of pushing his body through the water, to get to the other side. On a late-winter afternoon before giving a speech on wrongful convictions, Mr. Deskovic giggled mischievously as he stood at the edge of a hotel pool in Latham, N.Y., an Albany suburb, then leapt in abruptly, hugging his knees to produce a huge splash. In shorts and T-shirt, he sucked in some air and dived under, holding his breath. And holding it. He made his way across the pool in hurried, sideways strokes, and emerged gasping but smiling. "Yes! Yes! I did it," Mr. Deskovic yelled, his fists clenched above his head like a victorious boxer. "I still have it in me." A grown man with a full bushy beard, celebrating the simple accomplishment of an innocent youth. A tiny yet transcendent moment, one among many such moments of recaptured pleasures and newfound problems since his exoneration and release from prison last autumn. Having walked out of the Westchester County Courthouse vindicated yet petrified of the unpredictable tomorrows ahead, Mr. Deskovic found that his first year on the outside was more turbulent than triumphant. Still trying to recover what was stolen from him, he is, at 34, a free man who has yet to feel truly free. At least 205 men and one woman nationwide have been exonerated through DNA evidence since 1989, including 53 who, like Mr. Deskovic, were convicted of murder. In gathering information on 137 of them over the past four months — one of the most extensive such efforts to date — The New York Times found that many faced the same challenges Mr. Deskovic has confronted, like making a living, reconnecting with relatives and seeking financial recompense for his lost years. But given Mr. Deskovic's age at conviction (he was 17, one of about two dozen of the 206 exonerated inmates imprisoned as teenagers) and length of incarceration (about 35 percent spent more than 15 years behind bars), he has faced particular challenges. He could be the assertive adult who articulately lobbied at the State Capitol in April to require videotaping of police interrogations. He could also be the overgrown adolescent who stamped his feet and pouted at a Grand Central Terminal kiosk in August when asked if he wanted his smoothie with yogurt or apple juice. Having spent nearly half his life locked up, accused of brutalizing a high school classmate he hardly knew, Mr. Deskovic was sent into the world last fall lacking some of life's most fundamental skills and experiences. He had never lived alone, owned a car, scanned the classifieds in search of work. He had never voted, balanced a checkbook or learned to knot a tie. He missed the senior prom, the funeral of the grandmother who helped raise him, and his best friend's wedding. He said he had never made love. For six months, Mr. Deskovic got by on $137 a month in disability checks and $150 in food stamps from the federal government, carrying cans of tuna in his backpack. Now earning money through speeches and newspaper columns about wrongful conviction, Mr. Deskovic paid rent for the first time in his life in August, for a cozy attic apartment in Tarrytown that the county subsidizes because of his depression and post-traumatic stress disorder. In September, he filed a federal civil rights lawsuit against the police, the medical examiner, a prison guard and the governments of two counties, alleging that detectives falsified reports and coerced his confession, and that the prison guard groped and beat him. A separate lawsuit in the Court of Claims is planned seeking payment from the state for the wrongful incarceration. Since January, he has been enrolled at Mercy College in Dobbs Ferry, and he expects to earn a bachelor's degree in behavioral sciences in two months. Since June, he has studied daily for the Law School Admissions Test in hopes of soon going to law school. At Mercy on a $22,000 scholarship, Mr. Deskovic has read Marx, Freud and Jung but has struggled to navigate the nuances of flirtation and friendship. "These people are half my age," he said one morning in a campus cafeteria filled with loud young men in baseball caps and baggy jeans. "They have their own social networks and I'm not part of it. They have direction. They're going through the normal cycle of things." Mr. Deskovic's life after exoneration has been punctuated by milestones like getting a driver's license (and a $3,000 Pontiac Grand Am with a bumper sticker proclaiming, "Failure is not an option"), and new adventures, like playing table tennis at a Greenwich Village bar with people he had met online. There have been confounding trips to the supermarket and painful reunions with his mother, hard-won victories over his fear of speaking in public and profound disillusionment over his own inability to accept his past. And there was a bittersweet return to the courthouse in White Plains in May for the sentencing of the man found to have committed the crime, where the victim's mother offered Mr. Deskovic an apology: "How I would like to turn back time and return to you what was cruelly taken away." Of course, she can't. No one can. "Sometimes," Mr. Deskovic said one morning in his dorm room, "I feel that the only difference from here to prison is that I don't have bars on my windows." He was kneeling on his bed and staring at the neat lawn outside. "I'm free, but I'm trapped, and no matter how much I run, I'll never make up for the lost time." Scarred Life, Severed Family Carrying a box of religious and self-help books, a garbage bag full of legal documents and a few worn-out sweaters, Mr. Deskovic went from prison to Cobleskill, a speck of a town in central New York where his mother, Linda McGarr, settled after his conviction. He calls Cobleskill "the boondocks," adding an expletive whenever he is angry at his mother, which is often. While he was locked up, Ms. McGarr was Mr. Deskovic's connection to the outside world (he has never known his father). He wrote out letters longhand and sent them to her to type. She, in turn, sent money for cans of oysters at the prison commissary. When he needed to badger a lawyer, she was his voice. But the relationship withered through the bars. Ms. McGarr, 60, said she tired of the lonely 150-mile drives to visit him. Mr. Deskovic said he resented her lack of urgency in tackling his legal appeals. Two days after his release, Mr. Deskovic exploded: "How come you didn't do more to help me?" "I know you went through hell in there," Ms. McGarr responded, "but I paid dearly, too." The next morning, Mr. Deskovic stuffed his possessions in plastic bags and boarded a train to Peekskill, the scene of the crime that scarred his life. On Nov. 15, 1989, Angela Correa — a sophomore at Peekskill High, like Mr. Deskovic — slipped a "New Kids on the Block" tape into a portable cassette player and took her camera to a park near her home, snapping a picture of a dove perched on the roof as she left. Two days later, someone spotted her naked body in the woods. The police retrieved hair and semen samples, which did not match Mr. Deskovic's DNA; prosecutors argued that they were from earlier consensual sex. Mr. Deskovic, however, fit the description provided by a criminal profiler for the police, and raised investigators' suspicions when he cried copiously at Ms. Correa's funeral, though they were not close friends. (In a recent interview, Mr. Deskovic explained that he was always picked on in school and Angela was one of few students who were nice to him, once helping him with algebra.) After repeated questioning over two months, Mr. Deskovic confessed during a seven-hour interrogation and polygraph test, telling the police he had hit Ms. Correa with a Gatorade bottle and grabbed her around the throat. In the lawsuit, Mr. Deskovic contends that detectives fed him these details, and promised that if he confessed he would not go to prison but would receive psychiatric treatment. "I was tired, confused, scared, hungry — I wanted to get out of there," he recalled recently. "I told the police what they wanted to hear, but I never got to go home. They lied to me." More than a quarter of all prisoners exonerated by DNA evidence had falsely confessed or made incriminating statements, according to the Innocence Project, the legal clinic that secured Mr. Deskovic's release. Like many of those men, he had maintained his innocence since shortly after the confession, proclaiming at his sentencing hearing: "I didn't do anything." "Maybe you're innocent," the judge conceded before sentencing him to 15 years to life. "But the jury has spoken." Back in Peekskill after his release, frosty raindrops pelting his skin, Mr. Deskovic ambled past the police station on Nelson Avenue where he was held after his arrest and up Brown Street toward Crossroads, the apartment complex where he grew up. "I used to play kickball here, and when it snowed, I'd get a piece of cardboard and sled down this hill over there," he said, staring at a slope between a tall brick building and a playground. "I used to have a life." "Let's just say, for the sake of argument, that there are people on other planets and that all of a sudden you're dropped there, with no idea how these people live their lives, how their society works," he blurted. "I'm this alien. I'm the man pretending he knows what the hell is going on around him when, in fact, he's clueless." Growing up, Mr. Deskovic and his younger half-brother, Christopher McGarr, spent hours shooting hoops at Depew Park, swimming in a local pool or watching wrestling on television, then mimicking the moves of Hulk Hogan and Mr. T on the living-room carpet. "I didn't have no father growing up, so I looked up to my brother," explained Mr. McGarr, now 30. "But when he went to prison, a part of me died." On the school bus, other children called his brother a rapist, a killer. So he stopped taking the bus. Eventually, he stopped going to school. Soon he followed Mr. Deskovic into the criminal justice system, racking up more than 20 arrests and several stays in jail for drugs, theft, assault and trespassing. By the time of Mr. Deskovic's release, the brothers had not seen each other for 12 years. They waited another six months, until Mr. Deskovic was speaking at Siena College, near Albany, where Mr. McGarr lives. "I don't see him," Mr. Deskovic said as he entered the lecture hall. "He's right there," his mother replied, pointing to a man on a couch. Mr. Deskovic hesitated, pursing his lips to stop them quivering, then trudged over to his brother, who spread his arms. They hugged a long time — Mr. Deskovic in a suit and striped tie, Mr. McGarr in loose clothes and gold chains — as their mother snapped pictures and an uncle rolled video. "It's been so long," Mr. McGarr said, rubbing his fists against Mr. Deskovic's back. But the brothers saw each other only once more, for a tense evening of bowling and pizza in April. Mr. Deskovic's meetings with his mother have devolved into sporadic phone calls that invariably end in screams and tears. "Too much time has passed; we have no connection," Mr. Deskovic said. "My relatives don't know who I am." Seeking Friends In his canvas book bag, Mr. Deskovic carries a copy of a newspaper article about his exoneration, in case anyone questions why a convicted killer is walking the streets. The newspaper picture of him and his lawyers also adorns Mr. Deskovic's new Web site and MySpace page, which until recently included a plea: "Is anyone up to showing a man who has been away for 16 years how to have a good time?" In his loneliest moments, when he scans the few personal contacts on his cellphone and realizes he has no one with whom to share his angst, Mr. Deskovic misses the predictability of prison life, where decisions were made for him. At Elmira, guards woke Mr. Deskovic at 5:30 a.m. and escorted him to the kitchen, where he helped prepare breakfast for 1,800 inmates. He stood outside his cell for each of four daily counts; after the last, at 10:30 p.m., what the guards call the "quiet bell" signaled bedtime. "If I was looking for entertainment, I'd stand by the chess players in the yard until someone challenged me" for a match, Mr. Deskovic recalled. For kinship and protection, Mr. Deskovic — a former altar boy who converted to Islam during his first year in prison — sought out fellow Muslim inmates. "If it weren't for my religion," he said, "I would have taken my own life in prison, or I would have lost my mind." On the outside, life's pace is his to establish. During the week, there are classes, college work, psychotherapy sessions, meetings with a social worker and with the lawyers handling his compensation suit, plus practicing table tennis. Most weekends, he sits alone in his apartment, scouring the Internet for phone numbers of colleges, churches and other institutions that might be interested in hiring him for a speech. He also trawls the Web for companionship, joining a hodgepodge of groups: "Westchester/So CT Social and Active Group," "Straight Edge NYC" and a table tennis club. One June evening, Mr. Deskovic took the train to the Fat Cat, a cavernous basement bar in Greenwich Village, to meet the table tennis players. As a duo played Sinatra on piano and trumpet, Mr. Deskovic ordered a ginger beer and stood across the table from a 37-year-old stockbroker who runs the group. Score: 13-10. "I got the momentum, baby," Mr. Deskovic said, bobbing side to side. 14-10. 15-10. "I got the serve now!" 18-12. "I'm going to win! I'm going to win!" Speaking With Motivation On a brisk March morning, Mr. Deskovic arrived at the Mercy College cafeteria ahead of the breakfast rush, wearing a suit and carrying three ties on a hanger. He approached a woman wiping counters and whispered in her ear. She grabbed the silver tie with white diamonds and knotted it around his neck. "I'm an adult and I don't know how to fix my ties," Mr. Deskovic said. He wolfed down a plate of pancakes, then called Darren Wilkins, a concert promoter he met in December and hired to manage his career as a speaker. Weeks before, Mr. Wilkins took Mr. Deskovic shopping in Harlem, where he bought three four-button suits. For inspiration, they have listened to the Rev. Dr. Martin Luther King Jr.'s "I Have a Dream" speech. For technique, they have watched videos by the motivational speaker Tony Robbins. Together, they drafted a lecture describing the mistakes that led to Mr. Deskovic's wrongful conviction and outlining changes to prevent others from meeting the same fate. That March day, before speaking to the League of Women Voters at an elegant home in Bronxville, he and Mr. Wilkins, a Christian, held hands, bowed their heads and prayed. "Public speaking is a way for me to find some meaning to what happened to me," explained Mr. Deskovic, who has not applied for traditional jobs since his release, but has traveled across New York and four other states for speeches, including one in Texas in September. In Bronxville, Mr. Deskovic rested his hands on a plant stand in lieu of a lectern. His voice was flat and soft. He seemed to deliberately lock eyes with each of the 16 women sipping coffee. "If anything I've said here today has moved you in any way, I'd like you to join me in a movement against wrongful convictions and to get the death penalty out of New York State," he said. "Can you make a phone call? Can you join a demonstration?" Between speeches, Mr. Deskovic counts on donations of food, clothes and cash from people who have heard his story in the news, as well as members of local mosques and the Westchester charity New Beginnings. He rarely eats out, but for the occasional $4 kebab. Mostly, he survives on Cheerios, tuna, canned corn and shrimp-flavored noodle soup. On July 27, Mr. Deskovic got the keys to a one-bedroom attic apartment, in a yellow house with green shutters in Tarrytown. The living room window overlooks the Hudson River, a view much like the one he had during a short stint at nearby Sing Sing. He trimmed his beard that day, shedding perhaps the last visible reminder of the man prison had made him. A month later, a dean at Mercy College, Shelley Alkin, who had helped arrange Mr. Deskovic's scholarship after his release from prison, took him shopping at Pathmark to teach him about cleaning products, what types of food he ought to be eating and how much he should expect to pay. "And I have a plan for when I go shopping on my own," Mr. Deskovic said proudly. "I'm saving up the empty containers so I can bring them with me and buy the same things all over again."
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| The Murder of Linda Stein Broker to The Stars 'Don't you think it's lonely as you get older?" Linda Stein asked a friend last month. As always with Stein, it didn't sound like a question as much as a pronouncement, emanating in that Bronx rasp from that bright-red-lipsticked mouth atop that tiny, five-foot frame. Existential doubt had never been much of an issue for her: The punk-rock pioneer turned broker to the stars had stormed her way up from middle-class Riverdale to become something of a star herself. In 1975, she'd taken one look at the Ramones, decided they were the future of rock, and helped launch their incendiary ascent. A fixture at CBGB, the Mudd Club, and Studio 54, she leveraged her friendships in the eighties to become the first and greatest celebrity real-estate broker, selling to Madonna, Sting, Donna Karan, Bruce Willis and Demi Moore, and Billy Joel and Christie Brinkley. There were moments, many of them, when her personality upstaged her considerable accomplishments: She was a couture-clad Jewish Auntie Mame to her children, a vicious competitor to her colleagues, a heavy drinker and rampant pot-smoker with a volcanic temper she'd unleash even on her friends, and a compulsively profane guru to her entertainment-business clients, who were desperate for someone to guide them through the gilded briar patch of exclusive Manhattan real estate. "If she doesn't say fuck twenty times a day," her daughter Mandy, then a teenager, said in 1991, "she's repressed." Lately, though, Stein hadn't been herself. She had never fully bounced back from two radical mastectomies in the nineties, and last year, doctors discovered something new: a benign brain tumor that didn't require surgery but did call for a cocktail of mood stabilizers and other drugs that weakened her to the point where she couldn't lift her hair dryer. Her right arm was also numb—a lasting side effect of chemo. "She could pick up a glass, but she wouldn't feel it when she did," a friend says. A yoga nut since long before it was fashionable, she now needed yoga training just to comb her hair. She had sworn off vodka, more or less, though she still chain-smoked joints like they were cigarettes. She was going to AA, but she was no true believer. "We made fun of meetings," her old friend Danny Fields says. "I'd say to her, 'Linda, you can always leave,' but she'd say, 'I couldn't! I was sitting in front of blah-blah-blah. She has seven rooms on East 73rd. She could be my next client!'" There was always work, but the trophy properties she specialized in were harder to come by and sell. She had two particularly high-profile deals she was having trouble with—photographer Peter Beard's house in Montauk, listed at $26 million, and Sting's duplex at 88 Central Park West, asking price $24 million. Both were big exclusives, and she'd go into apoplectic fits about them every few days. She fantasized about leaving town, moving to Rome or Paris. But she'd tell friends, 'Let's face it. I am not retiring. I don't know what I'd do.'" For some years now, she'd sensed the world was passing her by. The Linda Stein of everyone's imagination was decades younger—still physically whole, and in every way indomitable. "She set very high expectations for herself," says a friend. "She felt if she didn't do a huge deal all the time that she wasn't living up to her own expectations." At 62, she was in competition with her own iconhood. What she really wanted, friends say, was a boyfriend. She would never say it like that; that would make her seem too needy. Instead, she'd let out a trademark Linda moan: "I really need to get laid!" She hadn't had a serious relationship in several years, and her one recent flirtation, with a suave younger colleague, had ended with her feeling played, then having the guy fired. "She was a big one on getting people fired," says one of her closest friends. There was someone new in her professional life, however—an assistant whom Stein's employer, Prudential Douglas Elliman, had sent in over the summer to replace the one she'd fired in June. Natavia Lowery was 26 years old, a lithe, quiet African-American woman with a pretty smile who had grown up in a Harlem housing project and now lived with her parents in a middle-class high-rise in Brooklyn. For months, no one really knew much about her, or talked much about how she and Stein were getting along, though it was understood that Stein grated on everyone around her. And this wasn't a typical temp job. What kind of assistant has to line up AA meetings for her boss, go jogging with her, do her boss's hair? Lowery, according to people close to her, was unnerved by the forced sense of intimacy. Stein, meanwhile, may have recognized something of herself in her new assistant: The girl was an outsider looking to break into a world of wealth and privilege, just as Stein herself had once been. When she was young. . 
| | If they seemed like just another pair locked in the familiar Manhattan boss-assistant microdramas, that all changed on the night of October 30, when Mandy, Stein's youngest daughter, discovered her mother's body face down in the living room of her Fifth Avenue penthouse in a pool of blood. The hood of Stein's sweatshirt had been pulled over her head. Police thought she might have fallen, but then they pulled the hood back. Someone had hit her with something heavy, the medical examiner would later determine, as many as six or seven times. There was no jewelry missing, no sign of a sex attack. The untidy, brutal method of the killing suggested it wasn't premeditated but a crime of passion. It didn't take long for the police to come to believe what many of those closest to her had suspected right away—that Linda Stein had finally, perhaps inevitably, pissed off the wrong person. The last person to see her alive, police said, was Natavia Lowery. Linda Stein was a proud member of a generation whose parents had struggled to get ahead for the sake of their children, only to see them rebel—first with rock and roll, then with the entire design of their lives. Born Linda Adler in 1945 in Manhattan and raised in Riverdale, she was teaching fifth-graders in the Bronx when she found her ticket out of a dreary middle-class existence. She was fixed up with Seymour Stein, the uncle of one of her students and a music-industry prodigy who had worked at Billboard as a teen, helping to create the first Hot 100 singles list, and knew the personalities in the Brill Building inside and out. Seymour's life had a Phil Spector–like arc—he was a kid from Brooklyn who'd made it big in the city. He had started his own production company, Sire Records, on West 74th Street. When he met Linda, she was a neighborhood girl who loved rock and roll as much as he did and was looking to enter the same world he'd already begun to master. In 1971, Linda and Seymour married and set up house in a nine-room apartment at the Kenilworth on Central Park West that he stocked with Deco long before anyone else was collecting it (the auction at Sotheby's in 2003 was called "The Collecting Eye of Seymour Stein"). They threw parties for others like them in the music world, former outsiders who'd found a home in the business. They traveled the world with friends like Reginald Dwight, whom Linda and Seymour met in San Francisco in 1970, before he became Elton John. And Bob Dylan, with whom she'd famously tell people she had phone sex. The Steins had two daughters, Samantha and Mandy, but that didn't appear to slow them down. Linda spent much of the early seventies traveling around the world with her friend Elton, onstage with him at Dodger Stadium, at his side when he dined with Princess Margaret. Samantha, Linda loved telling people, crawled out of her crib to find Iggy Pop rolling a joint on the living-room floor. In 1974, she met one of her closest friends, Danny Fields, who had signed Iggy and the Stooges to Electra in the late sixties. "She was like all the girls I was friends with growing up," Fields remembers. "Tough, sassy, smart. She was like the girl in Hairspray. She loved everything about rock and roll." Fields was already a rock-and-roll eminence, and had been friends with Warhol, too, giving Fields a certain street cred Stein's husband lacked. To Seymour, the Stooges were respectable but an afterthought—they'd never even had a hit. But to Linda, they were the next big thing. Linda and Fields instantly connected. "We always knew that she was a girl from the Bronx and I was a faggot from Queens. There was a bonding there—this outer- borough-to-Manhattan combination. That's the same river the Ramones crossed. That's the hardest river to cross." Tommy Ramone had been calling Fields constantly, begging the guy who had discovered the Stooges to come hear his band. When Fields finally saw them at CBGB in 1975, he offered to manage them on the spot. Then he called Linda. "You've got to see them," he said. "Bring Seymour. We need him, now." Seymour signed the Ramones to Sire, but Fields needed Linda, too, to help manage the band as it plotted its assault on Europe. "I couldn't handle the workload alone," he says, "and she knew all the international businesspeople. And she was married to the president of the company." Fields and Stein both remembered their time with the Ramones as Dionysian—drugs, parties, and, of course, sex. "Oh, Dee Dee!" Fields says of the deceased Ramones bassist. "Everybody fucked Dee Dee." (Including, he says, both him and Linda.) Stein's closest friends always seemed to be gay men: Elton, then Fields, then Bob Feiden, her regular escort to Studio 54. A friend says Linda shared some of the traits of the stereotypical seventies gay swinger: "She rode that roller coaster of someone without any regulator on her appetite or ambition. It was nihilism—party nihilism." Whom she slept with was another matter. "She was attracted to powerful men" like Seymour, says Fields. "But whoever she was having an affair with, she was crazy about. There was usually some cool gorgeous boy, like a bartender at Studio 54. She liked sex. She was like those girls in high school who amazed you because they actually liked sex." ..> 
| | ..> Her marriage to Seymour had been unwinding for years. They argued about freewheeling spending—"buying those shampoos she couldn't get in the Bronx," as Fields puts it. They argued about who had first claim on certain celebrity friends. Their lives became more and more separate, and the marriage ended in 1979. Twelve years later, they were still hammering out the fine print, but they were also, amazingly, still friends. She and the girls stayed in the Kenilworth. "Oh, we had Champagne the day the divorce papers were signed," Fields says. Linda and Fields dissolved their partnership, too, not long after the Ramones moved on to new management. "I would leave the office in a rage," Fields remembers. "It was like a marriage. The secretary became her secretary. There was a lot of addressing 5th-birthday-party invitations. We fought. She always said she knew better because she'd been married to Seymour Stein." Soon after she and Seymour split up, Linda earned a finder's fee for bringing an apartment to the attention of Edward Lee Cave, who was in charge of Sotheby's real-estate division. The apartment belonged to Seymour Stein. He'd toss her three more commissions in the years to come. It takes a certain kind of person to make a study of the rich and famous and to learn to cater to their unconscious needs without it seeming as if that's what you're doing. To have a real-estate broker who can speak confidently with a star about such things, without flinching or cringing or sucking up, Linda Stein came to realize, was a highly marketable skill. "People in the public eye, they can sense when you don't know how to react to them," one friend says. "But Linda had a knack for that." When newlyweds Billy Joel and Christie Brinkley were looking for a place to live, Stein found them two apartments at 88 Central Park West, and the couple joined them into a 7,000-square-foot duplex. When they divorced, Stein helped them sell the place to Sting for $4.8 million. In the eighties and nineties, she helped buy or sell apartments for Andrew Lloyd Webber, Madonna, Bruce Willis, Jann Wenner, Michael Douglas, Steven Spielberg, and her old friend Elton John. In March 1990, when Stein moved from Cave to Douglas Elliman, she signed a deal guaranteeing her a 65 percent share of commissions, not the usual 50-50, a private office, a personal assistant, and a chauffeured BMW. She appeared in "Page Six" eight times that year. When her daughters left the nest, she bought the penthouse on Fifth Avenue. By the mid-nineties, she hit $25 million in sales three years in a row, an enormous sum for the time. Her secret was to treat her clients like children, she said. "Stars and fifth-graders," she said, laughing, "it's all the same." Stein became an extreme example of a certain kind of character who thrives in the upper echelons of New York real estate. As it was often said, she didn't have the looks or the money, but she had the force of will. Like the best of the superstar brokers, she dominated clients, told them what to think—yelled at them, cursed even—about how they'd never get past a co-op board on Fifth Avenue and they'd be better off buying a condo on Central Park West. And if there was a co-op board to deal with, watch out: She once snapped at Angelina Jolie to get that fucking vial of Billy Bob's blood off from around her neck before it cost her a deal. Her bulldozing didn't charm everyone. She lost Madonna as a client after she was photographed showing her around co-ops, likely annoying the boards. Patrick McCarthy, the editor of W, demanded his deposit back when she blabbed about a deal of his to this magazine. Sotheby's fired her when she was quoted in the Times saying, "It's amazing these guys can ever make a business decision," referring to businessmen who buy expensive townhouses and then elect not to move in. She repeatedly demanded to her bosses, wherever she worked at the time, that certain colleagues be fired. Many of her peers kept a wary distance. "She was kind of a cheat for small amounts of money," says one person who did business with her in the nineties. "You had to watch her all the time. She'd beat the dog-walker for $20." One prominent broker knows "a lot of people at her company who were promised 25 percent or whatever, and when the time came, she just never paid. In her defense, maybe it wasn't in writing and the person never did any work. But if it happens so often, why don't you start putting it in writing?" ..> 
| | ..> Her temper often cost her not just deals but friendships. Even her daughters weren't exempt from her fury. "I'm not talking to that bitch today," she'd often say about one or the other. But she defended them to others, like any mother would. "Everything concerned her," a friend says. "Where are they going to live, can they pass the board? And, in the middle of it, ferocious fights. I'd cower in the corner." She even severed her friendship with Danny Fields over one of her daughters. He'd allowed Mandy to use 60 of his photos in a documentary she produced about the Ramones and, the day before the premiere, he still hadn't been paid. When his lawyer complained, Fields got a certified check the next day and a phone message from Stein: "Have a nice life." They didn't speak for months, he says—over $13,000 that wasn't even her daughter's money to pay. Then there was her cancer. In 1994, she had her first mastectomy and breast reconstruction. The second mastectomy came in 1996. She threw herself into fighting the disease; in some ways, it came to define her. Her theme song, Mandy said at the funeral, was "I Will Survive." She joined the board of Evelyn Lauder's Breast Cancer Research Foundation and got Elton John to perform for it in 2001. But she was still Linda. After one event she co-chaired, she called Lauder, furious that the photograph about the event that appeared in the paper didn't have her in it. "She said, 'I want to resign from the board,'" Lauder says, but she talked her down from the ledge. "You're not resigning, and that's the end of it!" she told her. She now recalls, "I learned you had to talk to her the way she talked to you." Her last known lover, a 68-year-old Italian contractor named Francisco Arena, did several renovations for Stein—he helped her through her latest bout of surgery, and they remained close after breaking up. In 2005, she started spending more time with 49-year-old Raul Garcia Bernal, her sales assistant at Elliman. Her friends called him "the Cuban." "She felt hurt by him," one friend says. "She definitely wanted more of a relationship than there ended up being." The final straw came last year, when he walked away from her at a $5,000-a-plate breast-cancer benefit she'd paid for him to come to so that he could work the room. It became clear, friends say, that Bernal only wanted her for her contacts. This past summer, Stein had been seeing a doctor about her brain tumor while renting a house in East Hampton, paid for, she said, by her bosses at Elliman. "It was definitely below-grade for Linda," says a friend—on the correct side of the Montauk Highway but with fixtures that looked like they came from Home Depot. "She hated that house. She would call it 'the horrible rental.'" She made the best of it by visiting with new friends like Jamie Drake, the interior designer, whom she asked to fix her up with any eligible men, and old friends like Paul Morrissey, who for several summers loaned her a cottage on the beach at Eothen, his estate in Montauk. She'd decided to return to Montauk next summer. There were ghosts from those years, like Linda McCartney, with whom she bonded over cancer. But Montauk, she believed, was the answer. It spoke to her of a younger self, one more alive and potent. "This is for me," she told Morrissey. "I'm gonna be in Montauk again." A few weeks before she died, Robby Browne, a friend and broker from Corcoran, saw her at an event at the Sherry-Netherland. "I hugged her really tight. I was worried about her over the summer." Browne pressed against Stein's reconstructed chest. "Well," Browne said, "your boobs feel good, so you must be doing all right." "Yes," she said. Pretty terse, for Linda. "And your brain-tumor thing?" he asked. "That's all right, too." Stein was questioning everything. She told people she was leaving Elliman because she'd didn't like the people there. She suggested to an interviewer in the spring that boldface names didn't matter to her the way they once had, that it was possible the fame of her clients was actually an albatross for her, something that kept her from getting deals done. "The press has been extremely detrimental to my career," she said. "Basically, people of great wealth do not want it discussed by anybody. Discretion, discretion, discretion!" For Linda Stein to wave off the press was a little like Joey Ramone's renouncing leather. Natavia Lowery had her own rivers to cross in life. She was born and raised in the Grant projects on Amsterdam Avenue and 125th Street, the only child of a housekeeper and a maintenance man. Her father died when she was a baby, and until her teen years, she lived with her mother, aunt, and uncle in a three-bedroom apartment on the sixth floor. When Lowery was in junior high, her mother, Lottie, met and married a man named Daniel Walsh, and the family moved to a twentieth-floor apartment about a half-mile from the Williamsburg Bridge, in Brooklyn. The goal for her family had always been to lift her up. "Our family worked very hard to get this child through school," says her aunt, Julia Carrow. "We had no trouble with her. No teenage pregnancy, no drugs, no alcohol. This child is not a violent child." <P>Lowery's aunt says the family saved to send her to Bishop Loughlin Memorial High School, a Catholic school, but reports have her being kicked out of that school and finishing at Murry Bergtraum High, a public school in Manhattan. She ran track and studied criminal justice. She liked styling hair and thought about modeling, and she couldn't wait to go away to college, to live on her own. She had wanted to attend college in Atlanta with one of her friends but ended up at North Carolina State University after reportedly temping for a year at the PR firm Rogers & Cowan. In college, she was a member of a modeling troupe called Black Finesse. She took out loans to go there but never finished. Instead, she earned a business degree at Hunter College. "When she got out of school, she wanted to be an entrepreneur," her aunt says. She lived in Virginia for a time, then moved home to Brooklyn to live with her parents. Here, competing portraits of Lowery have emerged: the sweet daughter and girlfriend who "would not smack a fly on her forehead," as an ex-boyfriend told one reporter, or a scheming opportunist with larceny in her heart. She was sued in Virginia last year for not paying $515 in rent. (Her stepfather says that she told him that a roommate had left and stuck her with her share.) A high-school friend named Harolena Grant has also accused her of using her name to open up a $300 T-Mobile account and a $300 Target account. "She's a pathological liar," Grant told a reporter, "and blamed it all on the boyfriend she was seeing at the time." Police eventually dropped the misdemeanor charges against her—because, Lowery's aunt insists, she hadn't done anything wrong to begin with. Back in New York, Lowery found work at a temp agency called Axion, which placed her in a clerical job with Planned Parenthood; soon after, she came to work for Linda Stein. Some of her duties were ordinary—work the phone, type up contracts, track listings and appointments—but the job quickly became personal. "She would go out jogging with her," says her aunt. "Linda would talk to her about things. She used to also do her hair, washing this lady's hair every day." You would think the stage would be set for a culture clash—the Brooklyn black girl and the brassy, often nasty Jewish doyenne. But one friend who worked closely with them remembers Stein having no complaints about her new assistant. He says Lowery was the sort of assistant who blended in—energetic but not overeager, not lunging for the phone but not ignoring it, either. Stein's yoga teacher even said Stein had complimented Lowery, said she was doing a good job. At times, Stein was flat-out kind to her. "She flew the girl's boyfriend into town and put him up in a nice hotel for her birthday," says a source. Still, "Linda had her way of talking to people," a colleague says. "It was not like The Devil Wears Prada. It wasn't 'Get me three lattes and be back three minutes ago.' But it wasn't 'Please be more careful next time,' either. It was 'What the fuck happened here?!' There's millions and millions of dollars involved and sometimes if you miss an e-mail it can really be costly." Lowery apparently never told her family that Stein had ever lashed out at her. But she did tell them how badly she could treat others. "She said every time she turned around, she was yelling at people," says her aunt. "She said she was a cancer survivor, but she still drank and smoked reefer all day long." The situation may have been more fraught than she let on. All boss-assistant relationships are loaded, and this one had special complications. Stein could be brutal, and certainly profane; anyone would bristle at that kind of treatment. She may have been especially hard on Lowery. Heavily invested in her own legend, now practically incapacitated by illness and medications, Stein may have been resentful, even furious, perhaps, about her dependency. The personal tasks Lowery was charged with were intrusive and arguably demeaning. And at the very least, Stein was patronizing. "Every time this girl would comb Linda's hair, she'd tip her," a source says. "Natavia was badly paid, and Linda was tipping her all the time." However nice Stein may have thought she was being, what ambitious black woman getting slipped tens and twenties all day on Fifth Avenue wouldn't walk away feeling diminished? Or even enraged? It was 10:30 p.m. the night before Halloween when Mandy Stein discovered her mother's body. It says something about the world of high-end Manhattan real estate that Linda helped create that in those first hours, when reports surfaced that a superstar Realtor had been murdered, people wondered which one. "We were hoping it was Dolly," one high-end broker says with a giggle about Dolly Lenz. Even Lenz herself oddly insists she got twenty calls from people, including her son. The first two names to surface as possible suspects were Stein's ex-boyfriend, Francisco Arena, and the broker who had spurned her, Raul Garcia Bernal. But they were apparently cleared within days. Then there was Lowery. Police interviewed her the day after the murder and released her. Although they told no one in those early days, police knew Lowery appeared in the building's security footage leaving at about the time of the murder carrying a bag and checking the soles of her feet. Could she have been checking for blood? When Lowery first met with detectives, her lawyer, Gilbert Parris, says he asked police not to question her without him present. She was permitted to go. But police spent the next several days searching for physical evidence in Stein's apartment. They took the bathtub apart, complete with part of the drainpipe; removed living-room carpet fibers and clothing; and even took a section of Stein's apartment door that apparently had a smudge on it. Days passed without any apparent movements in the case. But someone may have decided Lowery deserved further scrutiny, because on November 7, her sealed identity-theft arrest from last year was made public in the pages of the Daily News. Reporters set up camp outside Lowery's building in Williamsburg, and the next day, police say, she called the police to complain. Detectives Kevin Walla and Antonio Rivera met her without her lawyer—first at Kellogg's Diner in Williamsburg, then in a precinct house on the Lower East Side. By 6 a.m. the next day, police say, they had their confession. In a press conference on November 9, Commissioner Ray Kelly said that Lowery explained she'd been oppressed by Stein in any number of ways—physically, racially, and especially verbally. It was the harangues that seemed to get to her the most. "She was constantly yelling at me,'' she reportedly said, adding that Stein wouldn't stop and that she couldn't take it anymore. In her confession, police say, Lowery said things came to a head that day, when Stein started blowing pot smoke in her face and cursing at her as she worked on the computer—"Get the fucking e-mails! How can you be so fucking slow!"—all the while waving a four-pound strength-building yoga stick at her. Police say Lowery said she tried to do as she was told, getting the e-mails, and that Stein offered to buy her lunch, perhaps to make peace with her. "I've got my own money," Lowery is said to have admitted replying. Then, police say, came what Lowery said was the final straw. "Black people don't have any money," police say Stein snapped. "Save your money and I'll buy you lunch." In her confession, Lowery is said to have admitted she grabbed the weight and hit her boss in the head six or seven times before fleeing. But Lowery, police suspect, didn't leave without covering her tracks. She cleaned the apartment, they say, and they believe she left with the murder weapon, which is still missing. Stein's head was covered. Lowery even answered Stein's cell phone, telling a caller she couldn't come to the phone, and left the apartment and then came back, returning the phone before Mandy arrived. That night, police say, she used Stein's ATM card and pin number to withdraw $800. "Linda wouldn't have had her arrested if she stole $1,000 or $2,000," says one friend, "which makes it sad, even worse." Lowery's family is bristling under instructions from her lawyer not to talk, but in brief comments on the phone, they say their daughter loved Stein, that Stein's family had fingered Natavia as the murderer from the beginning, and that they believe her confession was coerced—that she begged for the chance to call her family. "They took her in the room and told her her mother would be filling out a missing-persons report if she didn't confess," Julia Carrow says. On the phone from Rikers, Lowery has told her aunt that the pot-smoke story is fiction. "That didn't happen," Carrow says. "She said she did not do that." She goes on to say Lowery was incapable of doing what she's allegedly confessed to. "My niece is not even big enough to beat Linda," she says. "This is a person who was enraged. My niece doesn't even fight. She's afraid someone's going to get her hair messed or snap one of her little nails." Carrow says it would have made no sense for Lowery to have killed Stein. "Natavia was there when Linda's daughter called her, saying she was going to be coming in that night," she says. "Who would kill somebody knowing she was on the phone with her daughter and her daughter was coming in?" The answer, at least according to police, is a young woman so angry that she simply snapped. Stein's friends have said they have no memory of her ever making racist comments like the one Lowery allegedly talks about in her confession. This was, after all, the same woman who counted Jay-Z and Damon Dash as pals and clients. The pot-smoking in Lowery's face also puzzles them. "She'd go into a different room to smoke," a colleague says. "She did the kinds of things that a cigarette smoker would do around nonsmokers. Open windows, go into rooms. It might as well have been a cigarette." But there is a possibility that Stein really wasn't herself that day. Her older daughter, Samantha, has said that her mother's medication could have caused even worse mood swings than Stein already famously had. A grand jury voted to indict Lowery for second-degree murder last Wednesday. Her lawyer is fighting the arrest, claiming the confession was coerced. Some criminal-law experts say a confession like Lowery's, brought in without a lawyer, could well be ruled inadmissible in court. Even the Stein family's lawyer, Ed Hayes, has told reporters he thinks that's possible. The family hopes the D.A. has more evidence—lab-test results from the crime scene, for instance. If not, police may well have found the culprit, they fear, only to lose her again. Dozens had to be turned away from Linda Stein's November 2 funeral at Riverside Memorial Chapel. Whoopi Goldberg made it in, as did Jann Wenner, Brett Ratner, Paul Shaffer, Clive Davis, Warner Music chairman Lyor Cohen, the rock-and-roll photographer Bob Gruen, Joey Ramone's brother Mickey Leigh, and Sting's wife, Trudie Styler. Elton John and Madonna issued statements mourning the loss. Everyone agreed that Linda would have adored the attention—even better, some whispered, than just dying of cancer. Seymour Stein said in his eulogy that he'd called her cell five times after she died, just to hear her voice. Mandy laughed about stealing her VIP-access card to Nell's as a teenager and then cried when she said her mother "opened up doors that we'd never dreamed would exist." Samantha, speaking next, took a more strident turn, explaining that it took three hours to make her mother's face presentable for her and Mandy to view one last time. "I had to see what this bastard had done to her," she said, channeling some of her mother's rage. "We stood there and we promised, 'Justice will be served.' We won't stop until justice is served." Standing in the doorway was Natavia Lowery, a week before her arrest, dressed in black, in tears. |
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| Long Term Economic Picture. The Bush Effect ReckoninThe Economic Consequences of Mr. Bush The next president will have to deal with yet another crippling legacy of George W. Bush: the economy. A Nobel laureate, Joseph E. Stiglitz, sees a generation-long struggle to recoup. by Joseph E. Stiglitz December 2007  The American economy can take a lot of abuse, but no economy is invincible. Illustration by Edward Sorel. When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantánamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page. I can hear an irritated counterthrust already. The president has not driven the United States into a recession during his almost seven years in office. Unemployment stands at a respectable 4.6 percent. Well, fine. But the other side of the ledger groans with distress: a tax code that has become hideously biased in favor of the rich; a national debt that will probably have grown 70 percent by the time this president leaves Washington; a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris—or even the Yukon—becomes a venture in high finance. And it gets worse. After almost seven years of this president, the United States is less prepared than ever to face the future. We have not been educating enough engineers and scientists, people with the skills we will need to compete with China and India. We have not been investing in the kinds of basic research that made us the technological powerhouse of the late 20th century. And although the president now understands—or so he says—that we must begin to wean ourselves from oil and coal, we have on his watch become more deeply dependent on both. Up to now, the conventional wisdom has been that Herbert Hoover, whose policies aggravated the Great Depression, is the odds-on claimant for the mantle "worst president" when it comes to stewardship of the American economy. Once Franklin Roosevelt assumed office and reversed Hoover's policies, the country began to recover. The economic effects of Bush's presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America's being displaced from its position as the world's richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush. Remember the Surplus?The world was a very different place, economically speaking, when George W. Bush took office, in January 2001. During the Roaring 90s, many had believed that the Internet would transform everything. Productivity gains, which had averaged about 1.5 percent a year from the early 1970s through the early 90s, now approached 3 percent. During Bill Clinton's second term, gains in manufacturing productivity sometimes even surpassed 6 percent. The Federal Reserve chairman, Alan Greenspan, spoke of a New Economy marked by continued productivity gains as the Internet buried the old ways of doing business. Others went so far as to predict an end to the business cycle. Greenspan worried aloud about how he'd ever be able to manage monetary policy once the nation's debt was fully paid off. This tremendous confidence took the Dow Jones index higher and higher. The rich did well, but so did the not-so-rich and even the downright poor. The Clinton years were not an economic Nirvana; as chairman of the president's Council of Economic Advisers during part of this time, I'm all too aware of mistakes and lost opportunities. The global-trade agreements we pushed through were often unfair to developing countries. We should have invested more in infrastructure, tightened regulation of the securities markets, and taken additional steps to promote energy conservation. We fell short because of politics and lack of money—and also, frankly, because special interests sometimes shaped the agenda more than they should have. But these boom years were the first time since Jimmy Carter that the deficit was under control. And they were the first time since the 1970s that incomes at the bottom grew faster than those at the top—a benchmark worth celebrating. By the time George W. Bush was sworn in, parts of this bright picture had begun to dim. The tech boom was over. The nasdaq fell 15 percent in the single month of April 2000, and no one knew for sure what effect the collapse of the Internet bubble would have on the real economy. It was a moment ripe for Keynesian economics, a time to prime the pump by spending more money on education, technology, and infrastructure—all of which America desperately needed, and still does, but which the Clinton administration had postponed in its relentless drive to eliminate the deficit. Bill Clinton had left President Bush in an ideal position to pursue such policies. Remember the presidential debates in 2000 between Al Gore and George Bush, and how the two men argued over how to spend America's anticipated $2.2 trillion budget surplus? The country could well have afforded to ramp up domestic investment in key areas. In fact, doing so would have staved off recession in the short run while spurring growth in the long run. But the Bush administration had its own ideas. The first major economic initiative pursued by the president was a massive tax cut for the rich, enacted in June of 2001. Those with incomes over a million got a tax cut of $18,000—more than 30 times larger than the cut received by the average American. The inequities were compounded by a second tax cut, in 2003, this one skewed even more heavily toward the rich. Together these tax cuts, when fully implemented and if made permanent, mean that in 2012 the average reduction for an American in the bottom 20 percent will be a scant $45, while those with incomes of more than $1 million will see their tax bills reduced by an average of $162,000. The administration crows that the economy grew—by some 16 percent—during its first six years, but the growth helped mainly people who had no need of any help, and failed to help those who need plenty. A rising tide lifted all yachts. Inequality is now widening in America, and at a rate not seen in three-quarters of a century. A young male in his 30s today has an income, adjusted for inflation, that is 12 percent less than what his father was making 30 years ago. Some 5.3 million more Americans are living in poverty now than were living in poverty when Bush became president. America's class structure may not have arrived there yet, but it's heading in the direction of Brazil's and Mexico's. The Bankruptcy BoomIn breathtaking disregard for the most basic rules of fiscal propriety, the administration continued to cut taxes even as it undertook expensive new spending programs and embarked on a financially ruinous "war of choice" in Iraq. A budget surplus of 2.4 percent of gross domestic product (G.D.P.), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II. Agricultural subsidies were doubled between 2002 and 2005. Tax expenditures—the vast system of subsidies and preferences hidden in the tax code—increased more than a quarter. Tax breaks for the president's friends in the oil-and-gas industry increased by billions and billions of dollars. Yes, in the five years after 9/11, defense expenditures did increase (by some 70 percent), though much of the growth wasn't helping to fight the War on Terror at all, but was being lost or outsourced in failed missions in Iraq. Meanwhile, other funds continued to be spent on the usual high-tech gimcrackery—weapons that don't work, for enemies we don't have. In a nutshell, money was being spent everyplace except where it was needed. During these past seven years the percentage of G.D.P. spent on research and development outside defense and health has fallen. Little has been done about our decaying infrastructure—be it levees in New Orleans or bridges in Minneapolis. Coping with most of the damage will fall to the next occupant of the White House. Although it railed against entitlement programs for the needy, the administration enacted the largest increase in entitlements in four decades—the poorly designed Medicare prescription-drug benefit, intended as both an election-season bribe and a sop to the pharmaceutical industry. As internal documents later revealed, the true cost of the measure was hidden from Congress. Meanwhile, the pharmaceutical companies received special favors. To access the new benefits, elderly patients couldn't opt to buy cheaper medications from Canada or other countries. The law also prohibited the U.S. government, the largest single buyer of prescription drugs, from negotiating with drug manufacturers to keep costs down. As a result, American consumers pay far more for medications than people elsewhere in the developed world. You'll still hear some—and, loudly, the president himself—argue that the administration's tax cuts were meant to stimulate the economy, but this was never true. The bang for the buck—the amount of stimulus per dollar of deficit—was astonishingly low. Therefore, the job of economic stimulation fell to the Federal Reserve Board, which stepped on the accelerator in a historically unprecedented way, driving interest rates down to 1 percent. In real terms, taking inflation into account, interest rates actually dropped to negative 2 percent. The predictable result was a consumer spending spree. Looked at another way, Bush's own fiscal irresponsibility fostered irresponsibility in everyone else. Credit was shoveled out the door, and subprime mortgages were made available to anyone this side of life support. Credit-card debt mounted to a whopping $900 billion by the summer of 2007. "Qualified at birth" became the drunken slogan of the Bush era. American households took advantage of the low interest rates, signed up for new mortgages with "teaser" initial rates, and went to town on the proceeds. All of this spending made the economy look better for a while; the president could (and did) boast about the economic statistics. But the consequences for many families would become apparent within a few years, when interest rates rose and mortgages proved impossible to repay. The president undoubtedly hoped the reckoning would come sometime after 2008. It arrived 18 months early. As many as 1.7 million Americans are expected to lose their homes in the months ahead. For many, this will mean the beginning of a downward spiral into poverty. Between March 2006 and March 2007 personal-bankruptcy rates soared more than 60 percent. As families went into bankruptcy, more and more of them came to understand who had won and who had lost as a result of the president's 2005 bankruptcy bill, which made it harder for individuals to discharge their debts in a reasonable way. The lenders that had pressed for "reform" had been the clear winners, gaining added leverage and protections for themselves; people facing financial distress got the shaft. And Then There's IraqThe war in Iraq (along with, to a lesser extent, the war in Afghanistan) has cost the country dearly in blood and treasure. The loss in lives can never be quantified. As for the treasure, it's worth calling to mind that the administration, in the run-up to the invasion of Iraq, was reluctant to venture an estimate of what the war would cost (and publicly humiliated a White House aide who suggested that it might run as much as $200 billion). When pressed to give a number, the administration suggested $50 billion—what the United States is actually spending every few months. Today, government figures officially acknowledge that more than half a trillion dollars total has been spent by the U.S. "in theater." But in fact the overall cost of the conflict could be quadruple that amount—as a study I did with Linda Bilmes of Harvard has pointed out—even as the Congressional Budget Office now concedes that total expenditures are likely to be more than double the spending on operations. The official numbers do not include, for instance, other relevant expenditures hidden in the defense budget, such as the soaring costs of recruitment, with re-enlistment bonuses of as much as $100,000. They do not include the lifetime of disability and health-care benefits that will be required by tens of thousands of wounded veterans, as many as 20 percent of whom have suffered devastating brain and spinal injuries. Astonishingly, they do not include much of the cost of the equipment that has been used in the war, and that will have to be replaced. If you also take into account the costs to the economy from higher oil prices and the knock-on effects of the war—for instance, the depressing domino effect that war-fueled uncertainty has on investment, and the difficulties U.S. firms face overseas because America is the most disliked country in the world—the total costs of the Iraq war mount, even by a conservative estimate, to at least $2 trillion. To which one needs to add these words: so far. It is natural to wonder, What would this money have bought if we had spent it on other things? U.S. aid to all of Africa has been hovering around $5 billion a year, the equivalent of less than two weeks of direct Iraq-war expenditures. The president made a big deal out of the financial problems facing Social Security, but the system could have been repaired for a century with what we have bled into the sands of Iraq. Had even a fraction of that $2 trillion been spent on investments in education and technology, or improving our infrastructure, the country would be in a far better position economically to meet the challenges it faces in the future, including threats from abroad. For a sliver of that $2 trillion we could have provided guaranteed access to higher education for all qualified Americans. The soaring price of oil is clearly related to the Iraq war. The issue is not whether to blame the war for this but simply how much to blame it. It seems unbelievable now to recall that Bush-administration officials before the invasion suggested not only that Iraq's oil revenues would pay for the war in its entirety—hadn't we actually turned a tidy profit from the 1991 Gulf War?—but also that war was the best way to ensure low oil prices. In retrospect, the only big winners from the war have been the oil companies, the defense contractors, and al-Qaeda. Before the war, the oil markets anticipated that the then price range of $20 to $25 a barrel would continue for the next three years or so. Market players expected to see more demand from China and India, sure, but they also anticipated that this greater demand would be met mostly by increased production in the Middle East. The war upset that calculation, not so much by curtailing oil production in Iraq, which it did, but rather by heightening the sense of insecurity everywhere in the region, suppressing future investment. The continuing reliance on oil, regardless of price, points to one more administration legacy: the failure to diversify America's energy resources. Leave aside the environmental reasons for weaning the world from hydrocarbons—the president has never convincingly embraced them, anyway. The economic and national-security arguments ought to have been powerful enough. Instead, the administration has pursued a policy of "drain America first"—that is, take as much oil out of America as possible, and as quickly as possible, with as little regard for the environment as one can get away with, leaving the country even more dependent on foreign oil in the future, and hope against hope that nuclear fusion or some other miracle will come to the rescue. So many gifts to the oil industry were included in the president's 2003 energy bill that John McCain referred to it as the "No Lobbyist Left Behind" bill. Contempt for the WorldAmerica's budget and trade deficits have grown to record highs under President Bush. To be sure, deficits don't have to be crippling in and of themselves. If a business borrows to buy a machine, it's a good thing, not a bad thing. During the past six years, America—its government, its families, the country as a whole—has been borrowing to sustain its consumption. Meanwhile, investment in fixed assets—the plants and equipment that help increase our wealth—has been declining. What's the impact of all this down the road? The growth rate in America's standard of living will almost certainly slow, and there could even be a decline. The American economy can take a lot of abuse, but no economy is invincible, and our vulnerabilities are plain for all to see. As confidence in the American economy has plummeted, so has the value of the dollar—by 40 percent against the euro since 2001. The disarray in our economic policies at home has parallels in our economic policies abroad. President Bush blamed the Chinese for our huge trade deficit, but an increase in the value of the yuan, which he has pushed, would simply make us buy more textiles and apparel from Bangladesh and Cambodia instead of China; our deficit would remain unchanged. The president claimed to believe in free trade but instituted measures aimed at protecting the American steel industry. The United States pushed hard for a series of bilateral trade agreements and bullied smaller countries into accepting all sorts of bitter conditions, such as extending patent protection on drugs that were desperately needed to fight aids. We pressed for open markets around the world but prevented China from buying Unocal, a small American oil company, most of whose assets lie outside the United States. Not surprisingly, protests over U.S. trade practices erupted in places such as Thailand and Morocco. But America has refused to compromise—refused, for instance, to take any decisive action to do away with our huge agricultural subsidies, which distort international markets and hurt poor farmers in developing countries. This intransigence led to the collapse of talks designed to open up international markets. As in so many other areas, President Bush worked to undermine multilateralism—the notion that countries around the world need to cooperate—and to replace it with an America-dominated system. In the end, he failed to impose American dominance—but did succeed in weakening cooperation. The administration's basic contempt for global institutions was underscored in 2005 when it named Paul Wolfowitz, the former deputy secretary of defense and a chief architect of the Iraq war, as president of the World Bank. Widely distrusted from the outset, and soon caught up in personal controversy, Wolfowitz became an international embarrassment and was forced to resign his position after less than two years on the job. Globalization means that America's economy and the rest of the world have become increasingly interwoven. Consider those bad American mortgages. As families default, the owners of the mortgages find themselves holding worthless pieces of paper. The originators of these problem mortgages had already sold them to others, who packaged them, in a non-transparent way, with other assets, and passed them on once again to unidentified others. When the problems became apparent, global financial markets faced real tremors: it was discovered that billions in bad mortgages were hidden in portfolios in Europe, China, and Australia, and even in star American investment banks such as Goldman Sachs and Bear Stearns. Indonesia and other developing countries—innocent bystanders, really—suffered as global risk premiums soared, and investors pulled money out of these emerging markets, looking for safer havens. It will take years to sort out this mess. Meanwhile, we have become dependent on other nations for the financing of our own debt. Today, China alone holds more than $1 trillion in public and private American I.O.U.'s. Cumulative borrowing from abroad during the six years of the Bush administration amounts to some $5 trillion. Most likely these creditors will not call in their loans—if they ever did, there would be a global financial crisis. But there is something bizarre and troubling about the richest country in the world not being able to live even remotely within its means. Just as Guantánamo and Abu Ghraib have eroded America's moral authority, so the Bush administration's fiscal housekeeping has eroded our economic authority. The Way ForwardWhoever moves into the White House in January 2009 will face an unenviable set of economic circumstances. Extricating the country from Iraq will be the bloodier task, but putting America's economic house in order will be wrenching and take years. The most immediate challenge will be simply to get the economy's metabolism back into the normal range. That will mean moving from a savings rate of zero (or less) to a more typical savings rate of, say, 4 percent. While such an increase would be good for the long-term health of America's economy, the short-term consequences would be painful. Money saved is money not spent. If people don't spend money, the economic engine stalls. If households curtail their spending quickly—as they may be forced to do as a result of the meltdown in the mortgage market—this could mean a recession; if done in a more measured way, it would still mean a protracted slowdown. The problems of foreclosure and bankruptcy posed by excessive household debt are likely to get worse before they get better. And the federal government is in a bind: any quick restoration of fiscal sanity will only aggravate both problems. And in any case there's more to be done. What is required is in some ways simple to describe: it amounts to ceasing our current behavior and doing exactly the opposite. It means not spending money that we don't have, increasing taxes on the rich, reducing corporate welfare, strengthening the safety net for the less well off, and making greater investment in education, technology, and infrastructure. When it comes to taxes, we should be trying to shift the burden away from things we view as good, such as labor and savings, to things we view as bad, such as pollution. With respect to the safety net, we need to remember that the more the government does to help workers improve their skills and get affordable health care the more we free up American businesses to compete in the global economy. Finally, we'll be a lot better off if we work with other countries to create fair and efficient global trade and financial systems. We'll have a better chance of getting others to open up their markets if we ourselves act less hypocritically—that is, if we open our own markets to their goods and stop subsidizing American agriculture. Some portion of the damage done by the Bush administration could be rectified quickly. A large portion will take decades to fix—and that's assuming the political will to do so exists both in the White House and in Congress. Think of the interest we are paying, year after year, on the almost $4 trillion of increased debt burden—even at 5 percent, that's an annual payment of $200 billion, two Iraq wars a year forever. Think of the taxes that future governments will have to levy to repay even a fraction of the debt we have accumulated. And think of the widening divide between rich and poor in America, a phenomenon that goes beyond economics and speaks to the very future of the American Dream. In short, there's a momentum here that will require a generation to reverse. Decades hence we should take stock, and revisit the conventional wisdom. Will Herbert Hoover still deserve his dubious mantle? I'm guessing that George W. Bush will have earned one more grim superlative. Anya Schiffrin and Izzet Yildiz assisted with research for this article. Joseph Stiglitz, a leading economic educator, is a professor at Columbia. |
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